Tag Archives: Energy Information Administration

A Look at the Declining US Coal Production and Coal-fired Power Generating Industries

US coal production was strong from the 1990s until 2014, with coal production each year being near or above 1 billion short tons (a “short ton” is 2,000 pounds). The highest annual level of production was achieved in 2008: 1.17 billion short tons. Since then, the coal industry has seen a steady decline in production, and trends indicate that the decline will continue.

In their 10 July 2019 report, “Almost all US coal production is consumed by electric power,” the US Energy Information Administration (EIA) reported that coal is still one of the main sources of energy in the US, accounting for 16% of the nation’s primary energy production in 2018. Nearly all of the coal consumed in the US is produced domestically, and most is consumed by the electric power sector to generate electricity, while some is exported.  The following EIA “coal flow” diagram shows where the coal comes from and (approximately) how it was consumed in 2018.  Total production was about 755 million short tons.  The electric power sector consumed about 84% of production, with only modest amounts being consumed by the industrial sector or exported.

You’ll find this EIA report here: https://www.eia.gov/todayinenergy/detail.php?id=39792

Electricity generation from coal has been on the decline in the US for almost two decades. On 26 June 2019, EIA reported that US electricity generation from renewables surpasses coal in April 2019. In the following EIA chart, you can see the long-term increase in generation from renewables, which contrasts sharply with the long-term decline of generation from coal due to the decommissioning of many coal-fired power plan and the commissioning of no plants since about 2014.

You can read this EIA announcement here:  https://www.eia.gov/todayinenergy/detail.php?id=39992

Between 2010 and the first quarter of 2019, US power companies announced the retirement of more than 546 coal-fired power units, totaling about 102 gigawatts (GW) of generating capacity. Plant owners intend to retire another 17 GW of coal-fired capacity by 2025.  You’ll find the EIA’s 26 July 2019 report on decommissioning US coal-fired power plants here:  https://www.eia.gov/todayinenergy/detail.php?id=40212

In April 2017, EIA reported that on the age of the US coal-fired generating plant fleet. The following chart shows the distribution of coal-fired plants based on their initial operating year.  EIA reported a fleet average age of 39 years in 2017.

You’ll find this EIA report here: https://www.eia.gov/todayinenergy/detail.php?id=30812

The following table lists EIA data on the numbers of different types of generating plants in the US between 2007 and 2017.  In 2007, the US had 606 coal-fired generating plants.  By the end of 2017, that number had dropped to 359.

You’ll find the EIA data here: https://www.eia.gov/electricity/annual/html/epa_04_01.html

In another decade, coal-fired generation will be only a small part of the US electric power generation portfolio and the average fleet age will be about 50 years old.  

U.S. Energy Information Administration’s (EIA) Early Release of a Summary of its Annual Energy Outlook (AEO) Provides a Disturbing View of Our Nation’s Energy Future

Each year, the EIA issues an Annual Energy Outlook that provides energy industry recent year data and projections for future years. The 2016 AEO includes actual data of 2014 and 2015, and projections to 2040. These data include:

  • Total energy supply and disposition demand
  • Energy consumption by sector and source
  • Energy prices by sector and source
  • Key indicators and consumption by sector (Residential, Commercial, Industrial, Transportation)
  • Electricity supply, disposition, prices and emissions
  • Electricity generating capacity
  • Electricity trade

On 17 May, EIA released a PowerPoint summary of AEO2016 along with the data tables used in this Outlook.   The full version of AEO2016 is scheduled for release on 7 July 2016.

You can download EIA’s Early Release PowerPoint summary and any of the data tables at the following link:

http://www.eia.gov/forecasts/aeo/er/index.cfm

EIA explains that this Summary features two cases: the Reference case and a case excluding implementation of the Clean Power Plan (CPP).

  • Reference case: A business-as-usual trend estimate, given known technology and technological and demographic trends. The Reference case assumes Clean Power Plan (CPP) compliance through mass-based standards (emissions reduction in metric tones of carbon dioxide) modeled using allowances with cooperation across states at the regional level, with all allowance revenues rebated to ratepayers.
  • No CPP case: A business-as-usual trend estimate, but assumes that CPP is not implemented.

You can find a good industry assessment of the AEO2016 Summary on the Global Energy World website at the following link:

http://www.globalenergyworld.com/news/24141/Obama_Administration_s_Electricity_Policies_Follow_the_Failed_European_Model.htm

A related EIA document that is worth reviewing is, Assumptions to the Annual Energy Outlook 2015, which you will find at the following link:

http://www.eia.gov/forecasts/aeo/assumptions/

This report presents the major assumptions of the National Energy Modeling System (NEMS) used to generate the projections in AE02015. A 2016 edition of Assumptions is not yet available. The functional organization of NEMS is shown below.

EIA NEMS

The renewable fuels module in NEMS addresses solar (thermal and photovoltaic), wind (on-shore and off-shore), geothermal, biomass, landfill gas, and conventional hydroelectric.

The predominant renewable sources are solar and wind, both of which are intermittent sources of electric power generation. Except for the following statements, the EIA assumptions are silent on the matter of energy storage systems that will be needed to manage electric power quality and grid stability as the projected use of intermittent renewable generators grows.

  • All technologies except for storage, intermittents and distributed generation can be used to meet spinning reserves
  • The representative solar thermal technology assumed for cost estimation is a 100-megawatt central-receiver tower without integrated energy storage
  • Pumped storage hydroelectric, considered a nonrenewable storage medium for fossil and nuclear power, is not included in the supply

In my 4 March 2016 post, “Dispatchable Power from Energy Storage Systems Help Maintain Grid Stability,” I addressed the growing importance of such storage systems as intermittent power generators are added to the grid. In the context of the AEO, the EIA fails to address the need for these costly energy storage systems and they fail to allocate the cost of energy storage systems to the intermittent generators that are the source of the growing demand for the energy storage systems. As a result, the projected price of energy from intermittent renewable generators is unrealistically low in the AEO.

Oddly, NEMS does not include a “Nuclear Fuel Module.” Nuclear power is represented in the Electric Market Module, but receives no credit as a non-carbon producing source of electric power. As I reported in my posts on the Clean Power Plan, the CPP gives utilities no incentives to continue operating nuclear power plants or to build new nuclear power plants (see my 27 November 2015 post, “Is EPA Fudging the Numbers for its Carbon Regulation,” and my 2 July 2015 post, “EPA Clean Power Plan Proposed Rule Does Not Adequately Recognize the Role of Nuclear Power in Greenhouse Gas Reduction.”). With the current and expected future low price of natural gas, nuclear power operators are at a financial disadvantage relative to operators of large central station fossil power plants. This is the driving factor in the industry trend of early retirement of existing nuclear power plants.

The following 6 May 2016 announcement by Exelon highlights the current predicament of a high-performing nuclear power operator:

“Exelon deferred decisions on the future of its Clinton and Quad Cities plants last fall to give policymakers more time to consider energy market and legislative reforms. Since then, energy prices have continued to decline. Despite being two of Exelon’s highest-performing plants, Clinton and Quad Cities have been experiencing significant losses. In the past six years, Clinton and Quad Cities have lost more than $800 million, combined.“

“Exelon announced today that it will need to move forward with the early retirements of its Clinton and Quad Cities nuclear facilities if adequate legislation is not passed during the spring Illinois legislative session, scheduled to end on May 31 and if, for Quad Cities, adequate legislation is not passed and the plant does not clear the upcoming PJM capacity auction later this month.”

“Without these results, Exelon would plan to retire Clinton Power Station in Clinton, Ill., on June 1, 2017, and Quad Cities Generating Station in Cordova, Ill., on June 1, 2018.”

You can read Exelon’s entire announcement at the following link:

http://www.exeloncorp.com/newsroom/exelon-statement-on-early-retirement-of-clinton-and-quad-cities-nuclear-facilities

Together the Clinton and Quad Cities nuclear power plants have a combined Design Electrical Rating of 2,983 MWe from a non-carbon producing source. For the period 2013 – 2015, the U.S. nuclear power industry as a whole had a net capacity factor of 90.41. That means that the nuclear power industry delivered 90.41% of the DER of the aggregate of all U.S. nuclear power plants. The three Exelon plants being considered for early retirement exceeded this industry average performance with the following net capacity factors: Quad Cities 1 @ 101.27; Quad Cities 2 @ 92.68, and Clinton @ 91.26.

For the same 2013 – 2015 period, EIA reported the following net capacity factors for wind (32.96), solar photovoltaic (27.25), and solar thermal (21.25).  Using the EIA capacity factor for wind generators, the largest Siemens D7 wind turbine, which is rated at 7.0 MWe, delivers an average output of about 2.3 MWe. We would need more than 1,200 of these large wind turbines just to make up for the electric power delivered by the Clinton and Quad Cities nuclear power plants. Imagine the stability of that regional grid.

CPP continues subsidies to renewable power generators. In time, the intermittent generators will reduce power quality and destabilize the electric power grid unless industrial-scale energy storage systems are deployed to enable the grid operators to match electricity supply and demand with reliable, dispatchable power.

As a nation, I believe we’re trending toward more costly electricity with lower power quality and reliability.

I hope you share my concerns about this trend.