The Coal Age Is Nearer to Its End
After burning coal to light up Cincinnati for six decades, the Walter C. Beckjord Generating Station will go dark soon—a fate that will be shared by dozens of aging coal-fired power plants across the U.S. in coming years.
Their owners cite a raft of new air-pollution regulations from the Environmental Protection Agency, including a rule released Wednesday that limits mercury and other emissions, for the shut-downs.
But energy experts say there is an even bigger reason coal plants are losing out: cheap and abundant natural gas, which is booming thanks to a surge in production from shale-rock formations in the U.S.
“Inexpensive natural gas is the biggest threat to coal,” says Jone-Lin Wang, head of global power research for IHS CERA, a research company. “Nothing else even comes close.”
For decades, coal produced more electricity than all other fuels combined, and as recently as 2003 accounted for almost 51% of net electricity generation, according to the U.S. Energy Information Administration.
But its share has dropped sharply in the last couple of years. It fell to 43% for the first nine months of 2011, as natural gas’s share has jumped to almost 25% from under 17% in 2003. Meanwhile, gas prices, on average, have fallen 37 cents to $4.02 per million British thermal units so far this year.
Many big utilities have announced retirements of coal-burning power plants, including Southern Co., Progress Energy Inc., First Energy Corp., Xcel Energy Inc., Ameren Corp. and the Tennessee Valley Authority.
Coal consumption by the power sector is expected to fall 2% this year and 4% next year; even small movements are important because utilities burned 92.4% of the 1,071 millionshort tons of coal distributed last year in the U.S.
American Electric Power Co., the biggest user of coal in the U.S., expects to burn 67 million tons of coal this year but anticipates its consumption will drop to 50 million tons after it retires 25 coal-burning generating units in six states by 2015.
Experts think 10% to 20% of U.S. coal-fired generating capacity will get shut down by 2016.
