Affordable Clean Energy Rule Not Impacting Expected Coal Capacity Retirements

Jul 16, 2019

U.S. energy-related CO2 emissions from 2005 to 2019
Credit U.S. Energy Information Administration

Power producers still intend to move forward with coal plant retirements despite a Clean Power Plan replacement under the Trump Administration. S & P Global Market Intelligence spoke with several major utilities with pre-existing plans to retire coal capacity. Taylor Kuykendall, a co-author, found the Affordable Clean Energy rule isn't changing anyone's minds.

"Obviously regulations matter to these utilities, but they're not the only driving force," he said.

Kuykendall, along with Ashleigh Cotting and Darren Sweeney, reached out to power plant owners with plans to retire the most coal-fired capacity in the coming years. They found the decline in natural gas and renewables, along with customer concern over climate change, were most impacting utilities' decisions.

Kuykendall said some are planning for the potential of climate legislation in the coming years.

"'We're better off paying for that now than putting those investment decisions off until later'," he paraphrased from a utilities' perspective. "You're not going to see a lot of decisions reverse just because of a regulation that really wasn't that tough on coal operations to begin with.

The report found 2018 was the second highest year for coal-fired capacity retirement with 13.5 gigawatts (GW) taken offline. 9.7 gigawatts are scheduled to come offline by the end of 2019. Another 20 GW is planned to come offline by 2024.

The U.S. Energy Information Administration is forecasting U.S.-related carbon dioxide emissions to lower in 2019 due to reduced coal use. That also stems from coal as a lower share of overall electricity.

The Affordable Clean Energy rule was finalized last month. Andrew Wheeler, U.S. Environmental Protection Agency administrator, said in a press release, "today, we are delivering on one of President Trump's core priorities: ensuring the American public has access to affordable, reliable energy."