U.S. to eliminate coal electricity in 12 years — report

Source: Miranda Willson, E&E News reporter • Posted: Wednesday, February 3, 2021

Coal could be eliminated from the U.S. power sector by 2033 as the costs of renewables fall, investment firm Morgan Stanley said in a research note this week.

Coal has been declining steadily from the electricity sector for the past decade and supplied about one-fifth of U.S. electricity last year, Morgan Stanley said. This year, higher natural gas prices will shift some electricity generation from gas to coal-fired power plants, resulting in a slight increase in coal use, the research note said.

But that trend will reverse indefinitely after 2021, Morgan Stanley said.

“[We] continue to project a constant decline thereafter,” the company said.

Most analysts say that coal has become increasingly uneconomical relative to gas and renewables, but the investment firm’s projections suggest that coal could be gone from the power sector even sooner than expected. Moody’s Investors Service, by comparison, projected in December that coal would still account for 10% of electricity production in the United States by 2030. Last year, the U.S. Energy Information Administration (EIA) said coal could continue to power as much as 13% of the country’s electricity mix by 2050.

At present, nearly three-quarters of coal-fired power plants are expected to retire by 2035, according to an analysis conducted last year by Georgia Institute of Technology professor Emily Grubert (Energywire, Dec. 4, 2020). While a handful of states have enacted laws to phase out the use of fossil fuels from the power sector, many utilities and energy companies have not announced if or when they intend to retire their coal resources.

By 2035, natural gas will supply 15% of the country’s electricity, while solar and wind will make up 55% of the electricity generation mix, according to Morgan Stanley’s projections. Hydropower and nuclear energy will support the rest of the power sector, Morgan Stanley said.

Although the research note said renewables will be the largest source of power by 2030, it said the amount of new wind and solar resources installed each year will remain “relatively unchanged” through 2035. However, the build-out of solar and wind may need to happen at a faster rate if the United States is to meet President Biden’s goal of 100% carbon-free electricity by 2035, according to Morgan Stanley.

While the firm’s projections are based on EIA data, political factors are also moving the needle from coal to renewables: Both the COVID-19 stimulus package passed in December and the “potential for continued federal support for clean energy” affected Morgan Stanley’s projections, the research note said.