Announced US coal-fired plant retirements to cut annual demand by over 65 mln T

ieefa.org Resource,  International 2019-08-06 09:31:02

U.S. coal producers delivered 65.5 million tonnes of coal, about 8.7% of the coal mined in 2018, to power plants set to retire between 2019 and 2032, according to an analysis by S&P Global Market Intelligence.


The analysis excluded plants that retired before July 4 in 2019. Meanwhile, only one coal-fired power plant has been built in the U.S. since 2014, a 17 MW plant at the University of Alaska's Fairbanks campus.


Despite efforts by President Donald Trump's administration to boost the coal industry, including the recent passage of the Affordable Clean Energy, or ACE, rule, at least eight coal companies have filed for bankruptcy since Trump took office in 2017, and power companies continue to retire coal-fired facilities.


The Powder River Basin delivered about 31.6 million tonnes of coal to plants retiring by 2032 – 9.8% of the total coal produced in the region in 2018. Three of the eight companies that have filed for bankruptcy since Trump took office, Westmoreland Coal Co., Cloud Peak Energy Inc. and Blackjewel LLC, operate in the region. Other top producers in the region including Peabody Energy Corp. and Arch Coal Inc., both of which now report stronger balance sheets after completing their own bankruptcy reorganizations in recent years.


Smaller producing regions also face a shrinking customer base. Southern Wyoming delivered 63.6% of its 2018 production to retiring plants and the Four Corners region delivered 53.8% of its production to retiring plants.


Producers face losing a significant portion of their customer base soon, as about 3.9 million tonnes of coal were delivered to plants set to retire in 2019. The coming years will see retirements affect still larger portions of producers' 2018 customer base, as about 6 million tonnes were delivered to plants retiring in 2020, about 7.1 million tonnes to plants retiring in 2022 and about 6.5 million tonnes to plants retiring in 2023.


Planned plant retirements could be booked even earlier in later integrated resource plans, according to Robert Godby, director for the energy economics and public policies center at the University of Wyoming. "Once they announce an earlier retirement that's not set in stone," Godby said. "A future IRP could accelerate that plan, and certainly the way the market is going being as dynamic as it has been this could be an issue."


(Writing by Becky Du  Editing by Tammy Yang)
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