KBRA: U.S. Electrical Utilities' Coal Use Fell 55% from 2010 to 2020
Pointing to regulatory pressures, the availability of low-cost and lower emission natural gas, and the increasing attractiveness of renewable energy sources, global rating agency KBRA published a research report on the significant decline in coal usage by U.S. electric utilities.
The number of coal-fired electricity generation plants in the U.S. dropped to 284 in 2020 from 580 in 2010, KBRA said in the report. Over the same period, the report said, the amount of coal used in the process fell by 55%. In 2010, the report said, 46% of U.S. electricity was produced by coal. By 2021, coal’s share had fallen to 22%. Meanwhile, the share of natural gas in U.S. electricity generation increased to 39% from 25%.
Regulators are driving a global push to reduce carbon emissions in certain industries, KBRA said, adding that gas offers price advantages. Meanwhile, the report said, advances in technology have encouraged the use of renewables and made them more cost-effective. Further progress in this area, KBRA said, will depend on such factors as the effective management of the regulatory thrust, the use of solar and wind power, and the maintenance of affordable electric rates.
The report also looked at the coal reduction strategies of two utilities, Atlantic City Electric (ACE) and Duke Energy (Duke). ACE has extricated itself completely from coal generation, KBRA said, while Duke has proposed quick and deep cuts in its use of coal after having closed 56 coal plants since 2010. The experience of both companies, KBRA added, points to a wider trend for the U.S. power generation sector. This shift is likely to continue, the report said, even in the face of increased transition costs. KBRA said nuclear power is an important fuel source for these two utilities based on its reliability and zero carbon attributes.
KBRA said ACE’s parent company, Exelon, relies on nuclear for 60% of its power generation, against 30% for gas and 10% for renewables. Exelon has no coal-fired generation, having divested more than 2,000 megawatts (MWs) since 2010.