Editorial: EIA forecasts more electricity from renewables than coal in 2020

In April, Longview Power filed for bankruptcy. The company’s main asset is its 700 megawatt (MW) coal-fired power plant in West Virginia, which produces enough electricity to continuously power more than 500,000 homes.

The company said the decision was taken “as a result of substantially lessened demand for electricity due to long term power-pricing pressure caused by cheap natural gas, an unseasonably warm winter, and the COVID-19 pandemic and resulting economic impact, which collectively have depressed power prices.”

But the coal company also said its main focus in the coming years will be developing and financing a 1,200 MW gas-fired facility and a 70 MW solar project.

Longview Power is just one of many companies abandoning coal. Earlier this month, Great River Energy, a wholesale electric power cooperative in Minnesota that provides electricity to 28 member-owned distribution cooperatives, said it plans to replace coal with cheaper renewables.

Its plan includes retiring its 1,151 MW Coal Creek Station in North Dakota in the second half of 2022; modifying its 99 MW coal and natural gas-based Spiritwood Station power plant to natural gas only; and adding 1,100 MW of wind energy purchases by the end of 2023.

Great River is also launching a battery storage project that involves installing a 1 MW battery demonstration system. The grid-connected storage system would be capable of delivering rated power continuously for 150 hours, longer than the four-hour usage period common among lithium ion batteries, it said. The project is slated for completion in 2023.

Last week, the U.S. Department of the Interior gave the greenlight to the construction and operation of the US$1 billion, 690 MW Gemini solar and battery storage project, about 48 km northeast of Las Vegas in Nevada. The project will couple battery storage with utility-scale solar power and once completed will be one of the largest projects of its kind in the world. It will also help cut carbon emissions by 1.5 million tons per year.

Slowly but surely, competition from wind and solar is taking its toll on coal. In a new report on the short-term energy outlook in the U.S., the Energy Information Administration (EIA) forecast that for the first time ever, the country is going to produce more electricity this year from renewable power than coal.

“It is a milestone that seemed all but unthinkable a decade ago, when coal was so dominant that it provided nearly half the nation’s electricity,” Brad Plumer, a climate reporter with The New York Times wrote last week. “And it comes despite the Trump administration’s three-year push to try to revive the ailing industry by weakening pollution rules on coal-burning power plants. Those efforts, however, failed to halt the powerful economic forces that have led electric utilities to retire hundreds of aging coal plants since 2010 and run their remaining plants less frequently.”

Hastening coal’s decline are the declining costs to build wind and solar capacity. Plumer calculated that the cost of constructing a large wind farm has fallen by more than 40% and solar by more than 80% since 2010.

In its report published on May 12, the EIA forecasts coal generation will plunge by 25% in 2020, compared with 11% growth in renewables, adding that “renewable energy is typically dispatched whenever it is available because of its low operating cost.” As for natural gas, the government agency says, it will remain relatively flat this year, “reflecting favorable fuel costs and the addition of new generating capacity.”

While it cautioned that its forecasts “are subject to a high degree of uncertainty,” the EIA said that it expects the electric power sector will add 20.4 gigawatts of new wind capacity and 12.7 gigawatts of utility-scale solar capacity this year.

Overall, it anticipates average coal consumption will fall by 23% to 453 million short tonnes this year, “primarily driven by a 24% decline in electric power sector consumption and persistently low natural gas prices.”

Next year, coal consumption should increase by 10% to 498 million short tonnes, due to higher prices expected for natural gas and an overall economic recovery that should drive electricity generation.

Overall, total electric power generation in the U.S. will decline by 5% this year, with the majority of the decline in electricity supply “reflected in lower fossil fuel generation, especially at coal-fired power plants.”

“Although some stay-at-home orders are beginning to be relaxed, the effects of social distancing guidelines are likely to continue affecting U.S. electricity consumption during the next few months,” the EIA said in its report.

It expects retail sales of electricity in the commercial sector and retail sales of electricity in the industrial sector will each fall by 6.5% in 2020, while electricity sales in the residential sector are will drop by 1.3%.

The result will be that U.S. energy-related carbon dioxide (C02) emissions are poised to fall by 11% (572 million tonnes) this year, compared to a 2.8% drop in 2019. “This record decline is the result of restrictions on business and travel activity and slowing economic growth related to COVID-19,” EIA said, adding that CO2 emissions will decline from all fossil fuels, particularly coal (23%) and petroleum (11%). Next year energy-related CO2 emissions will rise by 5% “as the economy recovers and stay-at-home orders are lifted.”