EIA Releases 2050 Projections For Energy & Makes
February 19, 2020 - The US Energy Information Administration (EIA) recently released its Annual Energy Outlook 2020 report. Unlike Lazard’s annual present to empirically oriented observers of the global energy transformation, the EIA’s reports typically are head-scratchers, and this one is no different.
EIA Annual Energy Outlook 2020 report graph out to 2050
Image courtesy EIA
That’s right, in the age of global warming, when the UN IPCC 1.5 degree reports make it clear that we have to cut our greenhouse gas emissions by 55% or so by 2030, the EIA thinks that that United States will still be getting 13% of demand from coal and 38% from natural gas.
There’s a lot to say about this, but let’s start with breaking down age and expected retirement date of generation assets, something which will make blindingly clear why this makes no sense even on the surface. Let’s play this forward. 2050 is 30 years from today.
EIA chart of 2018 electrical supply by source
Image courtesy EIA
That’s the 2018 EIA chart. Let’s pick apart some of the numbers.
Coal
Coal was at 27.5% of demand.
At 13,703 MW, 2019 marks the highest level of annual coal capacity retirements in the U.S. since 2015, a new S&P Global Market Intelligence analysis of federal data shows. The amount of coal capacity planned for retirement in 2020 is expected to exceed the amount retired in each of 2014, 2016 and 2017.
The federal government counts four new coal projects on a list of planned power plants nationwide. Three of those face long odds, and none will be able to replace the millions of tons in lost coal demand resulting from recent retirements, even as the Trump administration has vowed to revive the ailing industry.
Per S&P Global Market Intelligence, the average age of US coal plants is 40.
About 74% of all coal-fired power plants are at least 30 years old, and the average life of such plants is just 40 years, according to the National Association of Regulatory Utility Commissioners.
That said, coal plants tend to be run into the ground. This LBNL analysis shows that coal plants are expected to be retired by age 50 but run longer. Still, with an average age of 40, that gives an average age of 70 by 2030 and virtually none will be kept limping along.
Histogram of coal plant age, expected retirement and actual retirement
Image courtesy LBNL
Dry Fork Station near Gillette, which opened in 2011 and may prove to be the last coal plant ever built in the West.
Okay. What does all this tell us? That coal plants will almost all entirely be retired by 2050. That no new ones are going to be built to replace them. How exactly is 99% retirement of coal generation in the next 30 years going to result in 10% of demand from coal generation? The story of the past five years is the story of the impending death of coal globally and in the US, not the story of its renaissance. That’s why there are so many coal bankruptcies.
The EIA is head-scratchingly wrong in this prediction and it’s unclear why. I assume lobbying in this case, or coal-oriented idiots in the analysis group who refuse to let go and retire gracefully.