Monday, July 16, 2012

Key Facts: Plant Retirements Are A Trickle In 2012 & New Plants Outpace 2 to 1 Retirements

Reading the energy headlines creates the impression that a flood of power plant retirements is underway. For example, EPA rules are often said to be producing large numbers of coal retirements. Yet, during the first 5 months of 2012, plant retirements are a trickle.

EIA data for January to May, 2012 document the retirement of 2,776.7 megawatts of generating capacity of all types.  Just 1,635.5 megawatts were coal plant retirements.

Indeed, the real news in the retirement data of 2012 are two points.  First, in the first 5 months, approximately 0.25% of US generating capacity and about 0.5% of US coal capacity retired. 

The rate of coal retirements is twice the overall rate of plant retirements but remains low.  If one assumes a useful life of 40 years for power plants, 2.5% of the nation's generation would retire every year.

Not surprisingly, given the slow current rate of retirements, the amount of new capacity that began operating outpaced by 2 to 1 capacity that closed.  More than 5,627.1 megawatts began operation from January to May 2012, with natural gas and renewable energy dominating.

So key questions are, will the pace of plant retirements and new construction change in 2013 and 2014? Ye and here's why.

Based on the approximately 48,000 megawatts of coal plants that owners have announced will close over the next 10 years, the rate of retirements is likely to increase in the coming years.  For example, January 2015 is when the EPA air toxic rule takes effect, unless the courts stop it.

Rising retirements may also be matched by falling new plant generation, with the result that the amount of retirements could equal or even exceed the amount of new plant construction in some years.  That might happen even in 2013, since next year will be a bad year for new wind power that has often accounted for 30% or more of new capacity during the last 5 years.

Other bearish facts for new central station power plant construction are low wholesale market prices, large amounts of excess generation capacity in most areas of the country, rising demand response and energy efficiency, and slow increases in electricity demand.  

Still another challenge to central station power plants--new and old-- is booming deployment of on-site generation technologies like combined heat and power and solar.  For these reasons, the gap between the amount of retirements and new central station construction will certainly narrow and could even reverse in the coming years.


  1. For years we argued against Cap & Trade on the grounds that the costs involved were far too high for the meager benefits involved. But there WERE no benefits to be had from that absurd scheme. We're losing this fight, because rather than arguing against the junk science that is the foundation of the eco-fascists attack on our freedoms, we grant our sanction to it by say... "but it's just too expensive"

    This argument strikes me as being rather similar. "Yes, viable coal plants are being shut down, but not that many of them..."

    This is not the right way to fight the absurd edict of the Obama administration's EPA that declares CO2 to be a pollutant. It's not. CO2 is plant food, and one of the key components of life on earth.

    Without it, nothing would be green.

    We should be fighting with all of our resources against all government (and UN) efforts to shut down the coal industry. Modern coal burning technology is indeed one of the most economical ways of producing clean energy that we have.

    F. Swemson

    1. When should a plant retire? When it is 50 years old and without modern pollution controls so that it spews out pollution like mercury, nox, soot, sox that sickens people? When the costs of maintaining it and running it are greater than the market price of electricity? Should any plant retire? Modern plants do have pollution controls. Plants more than 40 years old generally do not. Owners can modernize them but that requires large investments. But right now market prices for electricity are low. Gas generation is very competitive. Those two factors are the main reason for retirements.

    2. Concerned ScientistJuly 17, 2012 at 3:54 PM

      Yes we do need CO2 and it is essential to life, but too much is going to change the planet in ways we won't like.

      There are lots of things that are good in moderation that are bad in excess. Iron essential for you in small amounts but can kill you in large amounts. Magnesium is essential in small amounts but can make you really sick in large amounts. You get the idea.

      Venus has an atmosphere that is 96% CO2 and the temperature there is >400C. That is in part because it is closer to the sun, but it is mainly because it has a runaway greenhouse effect that makes the temperature much higher than it would be if it had an atmosphere like ours. Earth would freeze over without some CO2 in the atmosphere. It is essential for life as we know it. But too much is going to heat things up and really change things in a way that we won't like. I, for one, am having a hard time dealing with this heat. This will be normal in a few years and a heat wave will be even hotter.

    3. @ Concerned Scientist

      "There are lots of things that are good in moderation that are bad in excess. Iron essential for you in small amounts but can kill you in large amounts. Magnesium is essential in small amounts but can make you really sick in large amounts. You get the idea."

      OK.. so let's define our terms.

      1: CO2, at roughly 390ppm, is roughly 4/10ths of 1% of the atmosphere, and less than 1/2 of 1 % of total CO2 comes from human activity... That's 16ppm or 1 part in every 62,500 in our atmosphere. And THAT statistically insignificant amount of a clear, odorless and tasteless trace gas is posing a threat to life on earth?
      2: CO2 levels on earth have been as high as 1800ppm, however since a doubling of CO2 will only produce a temperature increase of 0.8°C, it's not statistically possible for human activity to produce the results you imply.
      3: How much CO2 is too much for our planet? Since the average CO2 levels in crowded nightclubs & submarines is typically 6,000ppm to 8,000ppm, it seems once again, that it's statistically impossible for human activity to produce the results you imply.

      When temperatures rise over long periods of time, due (naturally) to changing levels of solar activity, the CO2 content of the atmosphere increases because the solubility of CO2 in water decreases as the oceans get warmer. CO2 increases as a result of rising temperatures, not vice-versa as the alarmists claim.

      Viv Forbes wrote:

      Lies About CO2
      Lie No 1: “Carbon dioxide is carbon”.
      “Carbon dioxide” is a gas produced when any carbonaceous material is burnt in air or digested in the gut of any animal. Wood, grass, coal, oil, natural gas, ethanol, biomass and all foods produce carbon dioxide when consumed.
      “Carbon” is a solid that occurs naturally as a black mineral called “graphite”, as beautiful diamonds or as charcoal or soot formed when carbonaceous matter is partially burnt. None of these forms of carbon are emitted from clean modern coal-burning power stations.Calling carbon dioxide “carbon” is like calling water “hydrogen”. It is deceptive propaganda designed to “blacken” the image of this harmless invisible natural gas.

      Lie No 2: “Carbon dioxide is a pollutant.”
      Carbon dioxide gets all the green ticks. It feeds all growing plants using solar energy. It also dissolves in lakes and oceans and combines with calcium to form the skeletons of coral reefs, sea shells and vertebrates. Carbon dioxide is the ultimate source of food for all life on earth - the gas of life. Without it, Earth would be a barren dead planet.

      Lie No 3: “Current levels of carbon dioxide in the atmosphere are dangerously high.” Carbon dioxide exists as a mere trace in our atmosphere. Current levels at about 390 parts per million are close to the lowest ever seen on earth. At this low level, plants cling to life and would cease to grow at about 150ppm. Most life probably evolved at 1,500 ppm.

      We must expose these three big lies and replace them with the simple truth: carbon dioxide is a harmless natural gas, not a sooty pollutant, it is the basis of all life on earth and there is nothing dangerous or unusual about current levels in the atmosphere.


    4. @Concerned Scientist cont.

      I understand that people can have a hard time dealing with our current heat wave, but you'd have a much harder time dealing with an extreme cold period. In a primitive environment, you'd probably starve, as plants don't grow in really cold environments.

      But you're talking about weather, when the discussion is about climate. There's a big difference. Weather has always changed back and forth between extremes of hot & cold, & wet & dry. Climate is nothing more than the long term averages of those constantly changing weather events, & science has proved that the primary cause of these swings is changes in solar activity levels. Rising & falling CO2 levels are part of the earth's feedback mechanism, but it's a result not a cause of climate change.

      Robert Heinlein said: "Climate is what we expect, weather is what we get"

      You shouldn't confuse the two.


  2. I was under the impression coal was booming outside of the US, but that stateside coal plants were coming fast and furious. Thanks for the post.

    1. US coal generation is declining because existing plants are operating less due to gas competition. Retirements are not the reason. Outside USA coal is booming because gas is much more expensive and not competitive with coal.