Facing declining demand for electricity and stiff federal environmental regulations, coal plant operators are planning to retire 175 coal-fired generators, or 8.5 percent of the total coal-fired capacity in the United States, according to an analysis by the Energy Information Administration (EIA).
A record-high 57 generators will shut down in 2012, representing 9 gigawatts of electrical capacity, according to EIA. In 2015, nearly 10 gigawatts of capacity from 61 coal-fired generators will be retired.
While many of those coal plants are old and relatively inefficient, the scope of this new planned shutdown is unprecedented.
“The coal-fired capacity expected to be retired over the next five years is more than four times greater than retirements performed during the preceding five-year period,” EIA noted in the analysis.
The generators that will be retired between 2012 and 2016 are “approximately 12% more efficient than the group of units, on average, that retired during 2009-2011,” according to the EIA.
The low price of natural gas resulting from the shale boom has led to reduced coal consumption and made the shutdowns necessary, experts say.
But federal and state regulations have also damaged the industry and contributed to plant closures.
“The cost of compliance with anticipated and existing Federal environmental regulations such as the Mercury and Air Toxics Standards (MATS) is a factor,” the EIA noted. “Particularly in the case of older, smaller units that are not used heavily, owners may conclude it is more cost efficient to retire plants rather than make additional investments.”
Most of the coal-fired generator retirements will occur in the Mid-Atlantic, Ohio River Valley and the Southeast.
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