As coal-fired electricity generating capacity in the US is retiring and remaining plants are utilized less, plant owners are evaluating new operating models, such as seasonal operations, according to a statement by the Energy Information Administration (EIA) on Wednesday.
Stricter air pollution requirements and reduced cost-competitiveness compared to other energy options have made coal-fired power plants less economical.
From 2011 to mid-2020, 95 gigawatts (GW) of coal capacity was either closed or switched to another fuel while another 25 GW is slated to shut down by 2025, the EIA said, citing data supplied by power plant operators.
The closures are expected to reduce the US coal fleet's capacity to less than 200 GW, more than one-third lower than its 2011-peak of 314 GW.
Although the US coal-fired power plant fleet is downsizing, coal-fired plants are still an important resource to meet electricity demand, especially during peak periods. This factor was evident during the heat wave that gripped most of the US during July and August 2020.
Data from EIA’s Hourly Electric Grid Monitor show that output from coal-fired generating plants reached an hourly dispatch of 161.5 GW on July 27, this year. Of the electricity generated on July 27 in the Lower 48 states, 24% was coal-fired and only natural gas-fired sources held a higher share at 45%.
The EIA explained that seasonal differences in capacity have become more pronounced over the past two years as cheaper natural gas and renewable generation has displaced coal during the months of spring in March, April, and May and in the fall months of September, October, and November.
The energy agency said that coal plants are sometimes unable to operate long enough during these times of seasonal changes to produce enough annual revenue to cover costs, leading the owners to run plants on a seasonal basis when electricity demand allows for steadier operation.
Under such an operational model, coal plants would operate only during times of increased demand for electricity in the winter from December to February, and in the summer from June to August to mitigate financial losses.
In 2020, the EIA said four large coal-fired plants announced plans to operate on a seasonal basis.
“Two of the plants, totaling 1,193 megawatts (MW), are in Minnesota, the other two are a 793 MW plant in Arizona and a 645 MW plant in Louisiana. The two units in Minnesota will run during the summer and winter. The plants in Arizona and Louisiana will only operate during summer because they are located in warmer climes.”
Nonetheless, seasonal operations are not always successful. In 2018, owners of a plant in Wisconsin and a plant in Texas switched to seasonal operations, the EIA said. “However, the practice lasted for less than a year because both facilities were completely shut down shortly thereafter.”
By Sibel Morrow