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Blog - Beginning of the End for Coal

Beginning of the End for Coal
By Gideon Needleman 10/17/2016 11:03 PM Comments

Beginning of the End for Coal

The Institute for Energy Economics and Financial Analysis (IEEFA) came out with a new report last month discussing coal-powered electricity generation in Texas (ERCOT) and how things are changing. A combination of low natural gas prices along with increasing amounts of renewables are putting the squeeze on coal, with 8-18 GW of coal fired generators at risk of retirement.

You can see that back in 2005 coal produced almost 40% of the electricity in Texas and this has dropped to about 25% today. This drop in energy production has not been spread evenly throughout all existing coal fired plants and instead some are faring worse than others.

As we can see here in the seven years between 2008 - 2015 several coal-fired plants have seen their energy production go down by 30 to almost 70 percent! The capacity factors on these plants have dropped steeply, check this out:

 In the extreme example you have the Monticello plant going from a 90 percent capacity factor to under 30 percent! A 90 percent capacity factor matches with a power plant that is producing electricity all the time with around 10% downtime for maintenance. A 30 percent capacity factor is completely different, the only way to achieve a number like this for coal is to shut down the plant for extended lengths of time, like entire seasons.

This graph demonstrates is that the economics of coal has fundamentally changed. Baseload generators like coal-fire plants are designed to be profitable when run almost constantly. Solar in particular will continue to eat away during the peak noon time rates, leaving baseload sources with more meager off-peak income. As the economics of renewables plus energy storage continuing to improve, you can expect this trend to continue.


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