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EIA Increases Short-Term Coal Retirement Prediction by 50%

Coal retirements are happening, and fast, according to new data from the U.S. Energy Information Administration’s 2014 Annual Energy Outlook reference case

EIA’s latest prediction that about 60 gigawatts of coal will retire by 2016 is up from about 40 gigawatts that it predicted just last year, and more than double the 27 gigawatts it predicted in 2012. It’s not the first time that EIA lowballed its estimates when it comes to the country’s energy mix. It has one of the most conservative outlooks for renewable energy growth too.

In 2012 alone, about 10 gigawatts of coal was retired, just over 3 percent of the total coal-fired generation assets operating in 2011, according to the EIA. From 2010 to 2012, the average size was 97 megawatts, compared to 145 megawatts for plants retiring in the coming decades.

The retirements in coming years, driven by the U.S. EPA’s the Mercury and Air Toxics Standards and low natural gas prices, will be larger plants compared to the facilities that have gone offline in the past few years.

The impact of retiring coal is sometimes described as a potential catastrophe to electric reliability, but so far that has not proved to be the case. In the western region of PJM, for example, energy efficiency, upgraded transmission and some renewables were largely able to make up the megawatts lost from from some coal plant retirements. 

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Discussions

Joe Deely's picture
Joe Deely on February 20, 2014

Nice to see them catching up with the news.

I love how Projected Cumulative Retirements flatlines after 2018… that’s a projection??

Anybody from EIA willing to bet $20 on that?

Jesse Jenkins's picture
Jesse Jenkins on February 21, 2014

Joe, it’s important to note that EIA’s projections are not really a “most probable” scenario, they are a “policy as usual” scenario. That is, they assume only existing laws and regulations on the books and no additional policy. So, for example, this forecast does not include any forecast regarding the effects of planned CO2 regulations on existing power plants which EPA is currently developing (and plans to release a draft rule this summer). Nor does it include any future acts of Congress. EIA forecasts have to be read in that light. Cheers,

Jesse

Robert Wilson's picture
Robert Wilson on February 22, 2014

Jesse

Yes, this is one of the great misunderstandings about a lot of energy forecasts. (note: in general I think forecasts are little above voodoo). Often they are not really predictions, but are things demanded by policymakers to see what impact existing policies will have. Annoyingly this stuff is rarely made clear when the things are communicated. The result is that people end up misunderstanding them. So, you get “renewables growing faster than predicted” when the forecast was not really trying to predict renewables growth. The ideal solution is that such things are only made available to policy makers and that public discussion is not polluted by inevitably inaccurate prophecy.

Joe Deely's picture
Joe Deely on February 23, 2014

Jesse, thanks for the feedback.

I realize that EIA “projections” do not infer any change in policy.

My problem is with the use of their term “projection” in chart when in fact they are not really looking beyond 2018. So why have a chart that uses the word projection and the year 2040? 

If they were actually to project beyond 2018 they might want to include the already public closures that are occurring in years following. Here are two exampes – although there are many more. Boardman plant in Oregon – 600MW plant closing in 2020 – http://www.oregonlive.com/business/index.ssf/2010/12/pges_coal-fired_boa...    Centralia plant in WA – 1340MW plant, first boiler closes in 2020 second in 2025 http://seattletimes.com/html/localnews/2014412221_coalplant06m.html

If they were actually to project they might decide whether a coal plant like the one at Intermountain has a high probability of closing once their contract with LA expires in 2025. http://articles.latimes.com/2013/mar/19/local/la-me-no-more-coal-20130320

If you are going to do an OUTLOOK then you should at least pretend to use the trends that exist today and project forward.

This is just another example of the shoddy work that comes out of EIA.

 

Kevon Martis's picture
Kevon Martis on February 23, 2014

The impact of retiring coal is sometimes described as a potential catastrophe to electric reliability, but so far that has not proved to be the case. In the western region of PJM, for example, energy efficiency, upgraded transmission and some renewables were largely able to make up the megawatts lost from from some coal plant retirements. “


Yet Andy Ott of PJM said (paraphrasing) this week that during the January 7th “polar vortex” PJM was 200MW away from shutting people off in bitter cold.

And with renewbable enegry mandates and subsidies depressing wholesale prices and efficiency mandates parasitizing revenue there is no market forc in place to pay for new generation in PJM.

The only generation being built is wind and solar, both notoriously low in capacity value.

With 22,000MW being retired in PJM by 2018, we may be just one more extreme weather event away from dead people.

Joe Deely's picture
Joe Deely on February 23, 2014

Kevon, Would you mind sharing quote from Andy Ott. I am interested in finding out if he was focused on a particular region within PJM. Thanks.

Kevon Martis's picture
Kevon Martis on February 23, 2014

It was give verbally at a conference in Columbus this week.

I am not sure it is in the presentation that was handed out. The vortex and the lack of capacity was the focus of discussion among Ott as well as Duke, AEP and FirstEnergy senior executives.

In retrospect I think the 200MW comment came from another commenter.

I wish I had it recorded.

The consensus among most participants (Not PJM) was that the capacity market is broken in PJM.

On the other hand it doesn’t take much to get an utility CEO to say they are on the verge of bankruptcy no matter their current share price.

Kevon Martis's picture
Kevon Martis on February 23, 2014

It all comes down to firm capacity: http://goanimate.com/videos/05eNLT00bJeE

Joe Deely's picture
Joe Deely on February 23, 2014

Gotcha…thanks for that.

I was wondering becuase –  the peak demand in January was 141,312 MW http://www.pjm.com/~/media/about-pjm/newsroom/2014-releases/20140131-pjm...

while the peak demand last July was 157,509 MW.  

http://www.pjm.com/~/media/about-pjm/newsroom/2013-releases/20130911-pjm...

Seems like their should be some “juice to spare”. You comment about “broken” may explain this.

Kevon Martis's picture
Kevon Martis on February 23, 2014

They lost several fossil plants in the cold snap.

Joe Deely's picture
Joe Deely on February 23, 2014

Again.. thanks for that info.

I found this article which I think explains things pretty well. Hope they get their act together before next winter.

http://www.reuters.com/article/2014/01/09/utilities-pjm-outages-idUSL2N0...

“Michael Kormos, PJM’s executive vice president for operations, cited weather-related mechanical failures and natural gas supply problems, as well as normal generation issues, for the increased power-plant outages during the bitterly cold time period.

“We’ve seen everything,” Kormos said.

In its report, PJM said 19,114 MW of steam boiler plants, most coal-burning units, were shut early Wednesday when overall outages were above 39,500 MW.

More than 16,000 MW of natural gas and diesel-fired plants were unable to operate, including nearly 2,300 MW of newer, combined-cycle, gas-fired plants.

About 9,000 MW of gas generation was affected by gas pipeline curtailments, PJM said, describing the amount as “a relatively small percentage of the total outages.”

Another 1,600 MW of nuclear generation was shut and nearly 1,500 MW of wind.”

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