The U.S. portfolio of electric power plants will continue to shift in 2015, according to a federal assessment projecting that nearly 16 gigawatts (GW) of generating capacity will retire in 2015. Most of the capacity to be retired this year is coal-fired generation. This continues a multi-year trend away from coal, and toward natural gas and renewable resources.
According to the U.S. Energy Information Administration, nearly 16 GW of generating capacity is expected to retire in 2015. Of this, 81% (12.9 GW) is coal-fired generation. Generator retirements are heavily composed of coal-fired generation, split between bituminous coal (10.2 GW) and subbituminous coal (2.8 GW). Most of this retiring
coal capacity is found in the Appalachian region, with slightly more than 8
GW combined in Ohio, West Virginia, Kentucky, Virginia, and Indiana.
New environmental regulations and struggles to remain cost-competitive explain most of these retirements. This year, the Environmental Protection Agency's Mercury and Air Toxics Standards (MATS) take effect. MATS
requires existing large coal- and oil-fired electric generators to meet stricter
emissions standards by retrofitting the units with new emissions control technologies. While some units
have been granted extensions to operate through April 2016, some power plant operators are choosing to retire units instead of making cost-prohibitive investments in pollution control.
Most of the coal-fired units slated for retirement are smaller and operate at
a lower capacity factor than average coal-fired units in the United
States. According to EIA, the to-be-retired units have an average summer nameplate capacity of 158 MW, just 60% as big as the 261 MW average for
other coal-fired units. In 2014, the average capacity factor
for all coal units was 61%, but the subset of coal units retiring in
2015 had an average capacity factor of just 36%. The relatively small size and low capacity factor of these power plants make it harder for them to compete economically against other generation sources. This competition is especially difficult if sufficient natural gas-fired generating capacity is available, as the cost of natural gas has fallen to levels not seen since 2012.
The coal capacity
retiring in 2015 accounted for 1.6% of total U.S. generation during
2014. At the same time, electric generating companies expect to add more than 20 GW of utility-scale generating capacity to the power grid. This new capacity is dominated by wind (9.8 GW), natural gas (6.3 GW), and solar (2.2
GW), which together compose 91% of expected new capacity in 2015.