POWER January 2020 - 38

POWER TRANSITIONS
Electric Power Generation: Coal
Is Currently a Vital Component
Over the past decade, there has been a significant change in the U.S. system of
power generation in the lower 48 states. The major factors that resulted in these
changes were the discovery of new natural gas resources, increased use of renewable
sources of power generation, and changes in environmental regulations. Although
these factors have resulted in a significant decline in electric generation
from coal, the fuel remains an important segment of the U.S. power mix.
Anthony Licata
T
he installed capacity and capacity
factors for the U.S. coal fleet have
been decreasing in recent years.
Much of the decline is due to economic
forces, resulting from the low price of
natural gas and higher costs of compliance
with various environmental regulations
for coal generators, both of which
give gas a competitive advantage over
coal when used for power generation.
Table 1 shows the decrease in installed
capacity of coal units and the increase
in capacity of gas-fired units and
renewables. The renewables discussed
in this article are mainly wind and solar
generation. Hydro is a strategic element
in the U.S.'s generation program, but
there have been few changes in recent
years in the country's installed hydro capacity,
which is about 80 GW. Nuclear
power remains a significant part of the
U.S. power mix, although several nuclear
plants have been decommissioned in
the past half dozen years, while only one
new reactor has come online since the
COAL
Year
Capacity
(MW)
Annual
change
(%)
NATURAL GAS
Capacity
(MW)
Annual
change
(%)
2009 314,294 0.3 401,272 1.0
2010 316,800 0.8 407,028 1.4
2011 317,640 0.3 415,191 2.0
2012 309,680 -2.5 422,364 1.7
2013 303,306 -2.1 425,390 0.7
2014 299,094 -1.4 432,150 1.6
2015 279,720 -6.5 439,425 1.7
2016 266,620 -4.7 446,823 1.7
2017 256,547 -3.8 456,012 2.1
2018 242,786 -5.4 470,237 3.1
Table 1.
U.S. Energy Information Administration (EIA)
38
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mid-1990s. The U.S.'s installed nuclear
capacity remains about 100 GW.
The 6.5% decrease in coal-fired capacity
in 2015 was related to the compliance
date for the Mercury and Air Toxics
Standards (MATS) and the decrease in
the price of natural gas. During the past
10 years, the installed coal capacity has
decreased 71.5 GW while the natural
gas and renewable installed capacities
have increased 69.0 GW and 110.9 GW,
respectively. Table 1 also shows that gas
and renewable projects have increased
capacity more than the decrease in coalfired
capacity by 108.4 GW.
The U.S. power industry has increased
capacity while demand for electricity has
been stagnant. However, there are areas
where additional capacity is required due
to transmission or pipeline limitations.
The U.S. Energy Information Administration
(EIA) reported that in 2009 the
electric utility industry generated 4,119
TWh. In 2018, it generated 4,174 TWh.
The average annual generation during
the 10-year period was 4,131 TWh, with
WIND
Capacity
(MW)
Annual
change
(%)
34,296 39.1
39,135 14.1
45,676 16.7
59,075 29.3
59,973
64,232
1.5
7.1
SOLAR
Capacity
(MW)
619
866
1,524
Annual
change
(%)
15.5
39.9
76.0
3,170 108.0
6,623 108.9
17,650 166.5
72,573 13.0 23,442 32.8
81,287 12.0 34,716 48.1
87,598
94,418
7.8
7.8
43,115 24.2
51,426 19.3
Installed net summer generating capacity in the U.S. by generation source. Source:
only one year deviating more than about
2% from the average.
Capacity Factors Largely Affected by
Gas Prices
Table 2 presents the annual capacity factors
for various sources of U.S. power
generation. Capacity factor is the ratio
of the electrical energy produced by
a generating unit over a period of time
considered to the electrical energy that
could have been produced at continuous
full-power operation during the same
period. With the price of natural gas for
power generation at historically low levels
for several years, coal plants have
experienced a decrease in capacity factors,
resulting in increased cycling, while
combined cycle and simple cycle natural
gas generation has increased. The nuclear
power fleet has maintained a fairly
constant capacity factor of about 91%
during this period. Table 2 also presents
the national average annual price of natural
gas used in power generation. There
is a direct correlation between the decrease
in installed capacity and capacity
factors for coal-fired units, and the price
of natural gas.
Figure 1 presents an analysis of the
amount of natural gas used in power
generation versus the cost of natural gas
to the power industry. There was a trend
starting in 2005 that demonstrates the
increased use of gas for power generation
as the price decreased. The graph
also shows the spikes in gas prices in
January and February between 2013 and
2018. The power industry must compete
for the use of gas with the priority
for home heating during these months.
Most power generation units that use
natural gas have interruptible contracts
that require them to curtail gas usage
under certain conditions. The peaks in
this figure for gas usage and price are all
weather-related.
POWER | January 2020
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POWER January 2020

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