S&P analysis sees more early retirements coming for U.S. coal-fired power plants

S&P analysis sees more early retirements coming for U.S. coal-fired power plants

first_img FacebookTwitterLinkedInEmailPrint分享S&P Global Market Intelligence ($):Several power markets have reported a drop in electricity demand of 10% or more due to the stay-at-home orders of the COVID-19 pandemic and the associated economic recession. Furthermore, first quarter 2020 reports show coal usage and employment decreased significantly, and impacts are continuing into the second quarter. S&P Global Market Intelligence ran a scenario of its Power Forecast with a constant 10% decrease in demand across all power markets except the Electric Reliability Council of Texas Inc., using the first-quarter forecast as the baseline for comparison. Results indicate significant decreases in coal-fired generation nationwide if demand reductions persist. Coal-fired generation in Midcontinent ISO and PJM Interconnection could use 30 million fewer tons of coal, while the Powder River Basin coal-producing region may deliver 34.8 million fewer tons due to the demand reduction.In 2020, when cheap natural gas and the 10% reduction in electricity demand act in concert to put pressure on coal, predictions show 154 TWh less coal production, equal to 23% of U.S. baseline coal generation, resulting in 83 million fewer tons of coal burned and 173 million fewer tons of CO2 released into the atmosphere. In 2021, after gas prices have rebounded, only the decreased demand remains, highlighting those impacts independently. Nationwide, 71 million tons of coal are at risk due to COVID-related demand decreases, equivalent to a 17% loss in production.In the case where demand remains 10% reduced and gas prices return, the power markets of MISO and PJM, both with historically large amounts of coal consumption, make up nearly half of the coal at risk. MISO could experience a 15.9 million ton loss from a drop in 28.5 TWh of generation from coal, equal to 15% of baseline coal usage. PJM could see a loss of 13.5 million tons, which reflects 31.3 TWh less generation, or 17% of baseline usage. The Southwest Power Pool is predicted to experience the largest cut in coal production, at 18%, or 9.7 million tons burned and 16.3 TWh of generation. In the Western Electricity Coordinating Council, Market Intelligence estimates a loss of 14%, equal to 7.9 million tons of coal, due to decreased electricity demand.From the perspective of coal production, the risk of demand reduction is not shared equally. With PJM in the East and MISO in the Midwest receiving much of the at-risk coal production, Powder River Basin coal for long-haul rail delivery is the first to be dropped. Western coal basins take the brunt of the risk, with more than 39 million tons in potential lost production.Powder River Basin and Northern Appalachia mines saw a sharp decrease in production in the first quarter of 2020, while Central Appalachia saw a slight increase. With a continued reduction in electricity demand and a return of gas prices, Appalachian coal is projected to greatly decrease, down 8.4% from 2018 production. Powder River Basin coal is expected to take the largest hit to volumes, with nearly 35 million tons at risk, or 10.5% of 2018 production.There are 15,628 MW of coal plants with scheduled retirement dates between 2021 and 2040 in the East, and 6,480 MW in the West. With decreased demand putting pressure on these units, there is an increased probability of early retirements, resulting in more strain on the mines from which they receive their fuel. In particular, Market Intelligence estimates that the North Antelope Rochelle and Black Thunder mines in the Powder River Basin are most at risk, attributed to the number of plants with planned retirements that may be accelerated due to reductions in demand. The Tunnel Ridge and Marshall County mines are the most at risk in Northern Appalachia from the same factors.[Katherine McCaffrey and Alexander Cook]More ($): COVID-19 electricity demand reductions could cut coal consumption 20% RRA S&P analysis sees more early retirements coming for U.S. coal-fired power plantslast_img

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