NEW YORK–(BUSINESS WIRE)–KBRA releases research on the use of coal to generate electricity in the US, which has declined significantly over the past 10 years.
The number of coal-fired electricity generation plants in the US declined to 284 in 2020 from 580 in 2010, or 51%. The total amount of coal consumed for electricity generation also declined by approximately 55% over the same period. There are several reasons for this trend, including (1) the global regulatory push to decarbonize certain industries; (2) the favorable economic trade-off presented by the increased availability of low-cost, lower emission natural gas; and (3) the technological advancement that led to the declining costs and increased production from renewable energy sources. For this trend to continue, many factors will need to be managed, in addition to the regulatory thrust, such as ensuring reliability given the intermittency of solar and wind power and maintaining affordable electric rates.
This report also examines the coal reduction plans of two utilities, Atlantic City Electric (ACE) and Duke Energy (Duke), to assess the interplay of these factors. ACE has eliminated all coal-fired generation with a recent transaction exiting two power purchase agreements (PPA). Duke, starting from a larger base of coal-fired generation, has made substantial progress reducing coal and has proposed plans to cut it further and faster. Regulatory concerns regarding costs may slow the transition but the longer-term momentum seems clear toward net zero carbon emissions.
The decline in the US electric utility industry’s coal use has been significant.
A deeper dive into the coal reduction plans of two utilities, ACE and Duke, suggests continued momentum in the electric utility industry for coal reduction efforts.
Higher costs can slow the transition away from coal, but the ultimate direction seems clear if system reliability and affordability goals can be achieved.
Nuclear power is an important fuel source for these two utilities going forward based on its reliability and zero carbon attributes.
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