Brattle Group Hikes Estimated Coal-Based Plants That Could Be Retired
More U.S. coal-based power plants than predicted earlier could close due to environmental regulations and weaker-than-expected demand costing the industry up to $144 billion, according to a study from the Brattle Group, Reuters reported. The researchers forecast that up to 77,000 MW of coal plant capacity would likely retire in the next five years, 25,000 MW more than had been estimated in 2010. The Brattle Group numbers were also higher than those from the Electric Power Research Institute, which said up to 61,000 MW could close over the next several years.
Brattle Group principal and study co-author Frank Graves was quoted as saying: “Everything else being equal, this amount of retirement will be enough to increase prices in both electric and gas markets for a few years, but we do not envision that impact to be large or persistent enough to alter retirement decisions.” The power industry would have to invest as much as $144 billion to retrofit and replace the coal-based plants.
In July 2012, generating companies said they would retire 30,000 MW of capacity by 2016. But since EPA has not yet finalized some emissions, cooling water and coal ash rules that number could change. Natural gas prices would be a critical element in determining how many coal plants were retired, Reuters reported. If natural gas prices increase by just $1 per million BTUs, coal plant retirements could drop to as low as 21,000 MW. If those prices fall by $1, coal retirements could increase to as much as 141,000 MW.
-Scott DiSavino
