POWER February 2011 - 6

SPEAKING OF POWER
Reaching Retirement
A
recent Washington Post article attacks
coal as a fuel with a dim future.
The author points to the large
number of plant retirements as evidence
of its impending demise. Checking the actual
data reveals a much different story.
The January 2 article, " Coal's Burnout, "
presents a view of the future of coal
plants that is more wishful than factual.
The article cites the number of coal plant
retirements- " power generating companies
. . . would retire 48 aging, inefficient
[plants] " -and the Sierra Club trumpets
those statistics as a sign that " coal is a
fuel of the past. " Surprisingly, the number
of plant retirements cited is much too low.
Not surprisingly, those retirements will
have no significant impact on the future
of coal-fired generation in the U.S.
Predicting Plant Retirements
A number of recent studies have examined
the magnitude and duration of coal-fired
plant retirements. For example, The Brattle
Group released a study, " Potential Coal Plant
Retirements under Emerging Environmental
Regulations, " in December last year. As part
of that study, the consulting group developed
a coal plant retirement screening model
that considered economic and environmental
drivers to various scenarios that predict when
existing coal-fired plants will retire.
The Brattle analysis found that the rate of
retirements accelerates by 2015 (when many
new boiler and other environmental regulations
are assumed to become effective). Bottom
line: Brattle estimates that 50 GW to 65
GW (up to about 20% of today's coal-fired
generation) will retire or will be " at risk " by
2020, and gas-fired assets will be constructed
to backfill reserve shortfalls. The two controlling
assumptions in the analysis are the
date when new environmental rules (maximum
achievable control technology, cooling
water, ash, and so on) become effective and
the future price of natural gas.
Little Loss in Generation
Let's put these numbers into the proper
perspective. The nameplate capacity of the
existing coal-fired fleet (1,436 plants) is
roughly 338.7 GW (about 30.1% of the nation's
entire installed power capacity) yet
those plants produced more than 45% of the
electricity consumed in the U.S. in 2010.
The average capacity factor of coal plants
in the U.S. was 65% in 2009 (the last year
for which I could find data), illustrating that
there are many coal plants that operate very
few hours each year. It's no secret that many
of those assets are past their prime and are
overdue for retirement.
Real and predicted plant retirement data
through 2015 best tell the retirement story.
SourceWatch, no fan of coal-fired plants,
maintains a database of coal plants that
have retired or will retire by 2015. I used
its data to prepare the table. The nameplate
capacity of plants on the retirement
list totals just under 9 GW through 2015
(there are very few announced retirements
post-2015). On the whole, the number of
Predicted coal-fired plant retirements through 2015. The total nameplate of retiring
plants is just under 9 GW. The Total averages are calculated over seven years. Source: SourceWatch
Year of
retirement
2009
2010
2011
2012
2013
2014
2015
Total
6
Number of units
announcing
retirement
11
20
14
22
10
4
10
91
Average age at
retirement (years)
47.2
50.8
55.8
51.5
56.2
45.8
61.4
55.1
Average capacity
retired (MW)
49.1
61.1
97.4
101.4
157.2
188.3
148.4
98.4
www.powermag.com
Total installed
capacity retired (%)
0.16
0.36
0.40
0.66
0.46
0.59
0.46
2.65
retirements through 2015 is quite modest
and includes very old plants that are
uneconomic to operate or upgrade. Also,
given the very low capacity factors of these
plants, the 2.65% loss of nameplate (MW)
is, in my estimate, less than 1% of generation
(MWh) spread over seven years.
Economics Rule
Power generators are in the business of
providing low-cost, reliable electricity to
their customers while (if it's a public company)
earning a reasonable rate of return
for shareholders. The modest number of
plant retirements is no surprise and certainly
not an indicator that the industry is
turning away from coal-fired generation.
In fact, the last National Energy Technology
Laboratory coal-fired plant database
lists 17 GW of new coal plants either under
construction, near construction, or
permitted-much more than the 9 GW lost
through retirement of the 91 plants listed
by SourceWatch.
I expect industry average capacity factors
will slowly increase over the next few years,
and plant retirements will allow executives
to focus limited capital on life-extension upgrades
of the remaining plants. In the long
term, trimming these underperforming assets
is just good business. ■
-Dr. Robert Peltier, PE is POWER's
editor-in-chief.
February Is National
Engineers Month
Each February, the National Engineers
Week Foundation coordinates various
agencies and professional organizations
to connect the classroom with
the workplace. February 20-26 is the
week when dozens of corporate sponsors,
professional societies, and-more
importantly-practicing engineers
" Turn Ideas into Reality. " Visit www
.eweek.org to check out your opportunities
to introduce the engineering
profession to students from elementary
through high school.
POWER | February 2011

http://www.eweek.org http://www.powermag.com

POWER February 2011

Table of Contents for the Digital Edition of POWER February 2011