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Coal generation to fall but the fuel will go on

THE retirement of older units, the retrofitting of existing units with pollution controls and the...

Noel Dyson

However, it believes coal will remain a key fuel source for the US, even though its share of the generating market is slipping slightly.

Two broad trends are affecting power companies’ decisions relating to coal-fuelled generating units: the recent environmental regulations and the winds of change sweeping the market driven by the “shale gale”

GAO reviewed forecasts of coal unit retirements based on current policies and agreed with the 15-24% estimate.

Its statistical analysis found the units more likely to be retired were the older, smaller and more polluting ones.

In total, GAO identified 15-18% of coal-fuelled capacity that power companies either plan to retire or that the GAO estimates may retire.

Regarding retrofits, the coal-fuelled generating fleet may also become less polluting in the future as power companies install controls on many remaining units.

Coal-fuelled capacity may decline as less capacity is expected to be built than is expected to retire.

Available information suggests the future of US coal use may be determined by several key factors, including the price of natural gas and environmental regulations.

The Energy Information Administration assessed several scenarios for future fuel prices and forecast coal’s share of US electricity generation would fall to 30% in 2035 if natural gas prices were low, or 40% if natural gas prices were high.

In addition, some stakeholders told GAO that future coal use could be significantly affected if existing environmental regulations became more stringent or if additional regulations were issued.

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