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New Report – Outlook Mostly Cloudy for Coal, Brighter for Clean Energy
nergy Information Agency 2012 forecast confirms America moving beyond coal, though report understates extent of coal's demise
WASHINGTON - January 23 - Coal-fired electricity will continue its steady decline in 2012, opening market space for clean energy, according to the 2012 energy outlook released today by the U.S. Energy Information Administration (EIA).
"For many years the Energy Information Agency has exaggerated coal’s prospects for the future, and every year has had to downgrade its projections," said Bruce Nilles, Senior Director of the Sierra Club’s Beyond Coal Campaign. "Today EIA again downgraded coal’s future, though we know coal's future is even darker than EIA is predicting."
The EIA's key projections for 2010-2035 include the following:
*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. Last year's EIA report thought coal would fall from 48 to 44 percent between 2010 and 2035, continuing the trend of having to downgrade its coal projections each year.
*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.
For the past five years, EIA's annual report has revised coal's market share further downward, with today's EIA report conceding that coal’s future is much dimmer than even a year ago. In 2010 the EIA projected that coal would drop to 44% of electricity generation by 2035, but just two years later the country has already hit 44%.
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.
"Even today's EIA projections remain far too rosy for coal; we expect the vast majority of coal plants to be retired no later than 2030," said Nilles. "We agree, however, with EIA’s prediction that no new coal plants will break ground in the future because clean energy is more cost effective, and we expect even more coal plant retirements."