U.S. utilities report huge savings after shutting down coal-fired power plants

Utilities are touting the cost savings of shutting down coal-fired power plants while pushing a further transition away from the fuel


Coal was the second-largest energy source for U.S. electricity generation in 2018—about 27 percent. Nearly all coal-fired power plants use steam turbines. A few coal-fired power plants convert coal to a gas for use in a gas turbine to generate electricity.

What Happened?
A review by S&P Global of power generators’ Q2 earnings calls, indicate that retiring coal plants and investing in other forms of generation is helping utilities across the U.S. hit their own emission reduction targets while mitigating some of the risks from increased scrutiny around climate change.

For example, WEC Energy Group Inc. Executive Chairman Gale Klappa said recent coal-fired power plant closures decreased the company’s operating and maintenance cost by an estimated $100 million on an annual basis.

The utility recently shut down three of its less efficient coal-fired power plants in Illinois, Wisconsin and Michigan.

Why It Matters
Due to the potential savings realized from shutting down these plants, several utilities with the largest planned coal plant retirements confirmed they are not changing course after the Trump administration finished the Affordable Clean Energy in mid-June, S&P Global Market Intelligence reported.

About 9.7 GW of coal capacity is expected to retire in 2019 alone, nearly as much as the 13.5 GW that came offline in 2018 when power generators recorded the second-highest level of coal retirements completed in recent decades.

“The combination of low-cost renewables plus storage is expected to be increasingly disruptive to the nation’s generation fleet, providing significant growth opportunities well into the next decade,” writes S&P Global reporter Taylor Kuykendall.

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