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January 23, 2012

New Report - Coal Use Shrinks while Clean Energy Expands

Smokestack1A new report today from the U.S. Energy Information Agency (EIA) confirms that America is moving beyond coal, though the EIA understates how dim coal's prospects are. According to the 2012 energy outlook released today, coal-fired electricity will continue its steady decline in 2012, opening market space for clean energy.

For many years the Energy Information Agency has exaggerated coal’s prospects for the future, and every year has had to downgrade its projections. Today EIA again downgraded coal's future.

In the 2012 Annual Energy Outlook presentation about new coal generation they stated that no new coal generation is added “beyond that which is under construction,” and that coal’s percent of electricity generation will shrink from the current 44 percent to 39 percent between 2010 and 2035. This is noteworthy, since in its 2010 Outlook (released in 2011) the EIA projected that coal would drop to 44% of electricity generation by 2035, but just one year later the country already hit 44%.

Some key projections from the EIA's 2010-2035 report:
  • At least 33,000 megawatts worth of existing coal-fired power plants are expected to retire in the coming decades, not including any retirements due to the recently-finalized mercury and air toxics standard from the Environmental Protection Agency. (For reference, an average-sized coal-burning power plant is approximately 500 megawatts).
  • The biggest difference from last year’s EIA projection is that more coal retirements will be driven by rising coal prices, state renewable energy standards and EPA clean air standards. All these signs point to reduced market share for coal and expanded market share for clean energy. 
  • Coal’s market share of U.S. electricity production is expected to continue to drop, from 44 to 39 percent.
  • No new coal plants are predicted to be constructed in the time period, beyond those few that are already under construction.
  • The share of electricity production from clean energy sources (including hydropower and biomass) should increase from 10 to 16 percent during the time period.
  • Overall electricity demand growth is expected to remain below one percent annually.

As I noted before, EIA has frequently overstated coal’s place in our electricity needs. Here is a sampling of what EIA said in 2006, 2008, and 2010.

2006 Annual Energy Outlook

The coal share is projected to decline slightly, from 50 percent in 2004 to 49 percent in 2020, before increasing to 57 percent in 2030. Additions to coal-fired generating capacity in the AEO-2006 reference case are projected to total 102 gigawatts between 2004 and 2025, as compared with 86 gigawatts in AEO2005. Over the entire period from 2004 to 2030, 174 gigawatts of new coal-fired generating capacity is projected to be added in the AEO2006 reference case, including 19 gigawatts at CTL plants.”

2008 Annual Energy Outlook:

“the coal share increases from 49 to 54 percent” between 2008 and 2030.  They further state that the US will need to install 263GW of new generating capacity in this period and 40 percent will be coal.”

2010 Annual Energy Outlook

In the Reference case, without (greenhouse gas) regulations, coal accounts for the largest share of total electricity generation (Figure 61). With slow growth in electricity demand, little new coal-fired capacity is added, and the coal share falls from 48 percent in 2008 to 44 percent in 2035.

Even today, EIA’s projections remain far too rosy for coal, though. While the EIA estimates that over the next 25 years approximately 33,000 megawatts of existing coal power will retire, the Sierra Club has identified over 38,000 megawatts of existing coal power that has retired or announced an upcoming retirement since January 2010 – and more are expected soon. There are about 340,000 megawatts of coal in the United States as of January 2010.

The data paint a brighter future where coal mining, burning and coal ash disposal does not threaten thousands of communities across the United States. Coal is being replaced with cleaner energy choices.  Here at the Sierra Club we are working overtime to help accelerate this trend by preventing the construction of new coal plants, retiring and replacing existing coal plants with clean energy, and keeping the large U.S. coal reserves out of world markets.

--Bruce Nilles, Senior Director of the Sierra Club’s Beyond Coal Campaign.

The Sierra Club’s Beyond Coal campaign works in partnership with Bloomberg Philanthropies and a nationwide coalition of allies to retire one-third of the nation's aging coal plants by 2020, replacing them with clean energy like wind and solar by 2030. Coal plants are the largest sources of climate disruption and toxic air pollution like mercury, soot and carbon pollution.

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