New National Economic Study Shows Hundreds of Old Coal Generators Are Candidates for Closure

Energy Efficiency, Wind Power and Existing Gas Plants Could Replace Obsolete Plants and Provide Affordable, Reliable Electricity

Published Nov 13, 2012

BALTIMORE (November 13, 2012) – As much as 18 percent of the country’s coal generating capacity should be considered for closure because the electricity it produces will be more expensive than energy from lower cost natural gas or wind power, according to a new independent analysis released today by the Union of Concerned Scientists (UCS). The peer-reviewed study, based on publicly available data on the U.S. coal fleet, used an economic test to evaluate whether every coal generator could compete – after being upgraded with modern pollution controls – with available cleaner, lower-cost energy resources.

The report, "Ripe for Retirement: The Case for Closing America’s Costliest Coal Plants," found that as many as 353 coal generators, located in 31 states, may no longer be economically viable after they are upgraded with modern pollution controls.  The power these generators produce would cost more than electricity produced by natural gas power plants and, in many cases, wind power. Collectively, these ripe-for-retirement generators produce approximately 6 percent of the nation’s power and represent 59 gigawatts (GW) of power generation capacity.  

“Our analysis shows that switching to cleaner energy sources and investing in energy efficiency often makes more economic sense than spending billions to extend the life of obsolete coal plants,” said Steve Frenkel, report co-author and director of UCS’s Midwest office. “Regulators should require utility companies to carefully consider whether ratepayers would be better off by retiring old coal plants and boosting electricity generation from natural gas and renewable energy sources like wind. Spending billions to upgrade old coal plants may simply be throwing good money after bad.”

Ripe for Retirement ranks the states and utilities with the most coal-fired power capacity that should be considered for closure. Georgia tops the state list, followed by Alabama, Tennessee, Florida, Michigan, South Carolina, Wisconsin, Indiana, Mississippi and Virginia. Southern Company, one of the nation’s largest private utilities, owns the most coal-fired capacity ready for retirement, followed by government-owned Tennessee Valley Authority. Duke Energy, American Electric Power and FirstEnergy, though high on the list, have fewer economically vulnerable generators, in part, because they each have already announced they are closing several coal generators.

Plants that are candidates for retirement are typically older, less efficient, underutilized, and more polluting than the rest of the nation’s coal fleet. These generators average 45 years in age, well beyond the 30-year expected life span for a typical coal generator. These plants are less efficient, operating only at 47 percent of capacity, compared with 64 percent for the total U.S. coal fleet. In addition, 70 percent of these generators lack adequate equipment to control the emissions of at least three of the four harmful pollutants examined in the analysis (sulfur dioxide, nitrogen dioxide, mercury, and soot).

“With appropriate planning, the vast majority of these coal generators could be closed and replaced with cleaner, more affordable resources while maintaining reliability,” said Jeff Deyette, a UCS energy analyst and report co-author. "Every region in the country has the potential to more than replace retiring coal generation by ramping up underutilized natural gas plants, increasing renewable energy through existing state policies, and reducing demand through current energy efficiency programs.”

Existing state-level clean energy policies that require greater use of renewable energy and energy efficiency are spurring major increases in wind, solar, geothermal, and bioenergy facilities and driving down power demand. From 2012 through 2020, renewable energy policies are projected to spur the installation of 55 GW of new renewable energy capacity. In addition, energy efficiency policies in place in 27 states are projected to reduce national electricity use 5.7 percent by 2020.

“This is an historic opportunity to accelerate the transition to a clean energy economy.  Decisions we will make in the next three to five years can improve public health, reduce global warming, and create a more resilient energy system,” said Frenkel.

Shuttering the 59 GW of coal-fired generators the study identified along with 41 GW already slated for closure would reduce the electric power sector’s annual carbon dioxide emissions up to 16.4 percent, or 410 million tons, depending on what resource replaces coal. Besides emitting pollutants associated with asthma, neurological damage, heart attacks and cancer, coal-fired power plants are the nation’s largest single source of heat-trapping carbon dioxide emissions, the primary cause of climate change.