Operating coal-fired generating capacity has declined 15% since 2011 in response to low natural gas prices and environmental regulatory compliance

EIA recently released preliminary data from its annual survey of electric generators (EIA-860), which provides the electric generating capacity of all units with a capacity of 1 megawatt (MW) or greater. The most important trends over the past few years have been large increases in natural gas, solar and wind generating capacities along with a significant decline in coal generating capacity.

Coal-fired generating capacity in the United States has fallen 15% over the past six years, dropping from 317 gigawatts (GW) at the end of 2010 to 276 GW in April 2016. This decrease is primarily attributable to the competitive pressure from low natural gas prices, which lowers the marginal cost of natural gas-fired generation, and the costs and technical challenges of environmental compliance measures.

Because the EIA-860 data also provide information on pollution control equipment at electric power plants, investments in these technologies can be assessed. For example, a significant amount of pollution control equipment was recently installed in response to the U.S. Environmental Protection Agency's (EPA) Mercury and Air Toxics Standards (MATS). MATS establishes emissions limits for toxic air pollutants associated with coal combustion such as mercury, arsenic, and heavy metals. Between January 2015 and April 2016, about 87 GW of coal-fired power plants installed pollution control equipment, nearly 20 GW of coal capacity retired, and about 5.6 GW of coal capacity switched to natural gas as the main fuel source.

Of the 87 GW of coal capacity that installed pollution control equipment to comply with MATS, activated carbon injection (ACI) was the dominant compliance strategy. More than 73 GW of coal-fired capacity installed ACI systems in 2015 and 2016, effectively doubling the amount of coal capacity with ACI. According to EIA data, the average capital cost of an ACI system was $5.8 million over 2015 and 2016

Other compliance strategies reported on the 2015 EIA-860 include the modification of existing emissions control equipment, the addition of new equipment or capabilities, or some combination of operational changes and new investments to improve mercury capture or to achieve other environmental control objectives, such as reducing emissions of particulate matter or nitrogen oxide. Overall, the preliminary EIA-860 data indicate that operators of coal-fired power plants invested at least $6.1 billion between 2015 and April 2016 to comply with MATS or other environmental regulations.

Preliminary 2015 EIA-860 data can be useful in assessing changes to electric generating capacity such as growth in renewable and natural gas capacity along with decreases in coal capacity. These data can also indicate how power plants responded to market and regulatory pressures, which can be useful when looking at the causes behind the capacity changes.

Principal Contributor:

Tim Shear
(Tim.Shear@eia.gov)