Coal will remain part of the US grid until 2050, federal energy projections say

EIA’s Annual Energy Outlook isn’t without critics.

Enlarge / GILLETTE, Wyo.: A truck loaded with coal is viewed from the Eagle Butte Coal Mine Overlook which is operated by Alpha Coal. The area is a large producer of coal. Gillette uses the moniker of "The Energy Capital of the Nation." (credit: Matt McClain/The Washington Post via Getty Images)

On Thursday, the US Energy Information Administration (EIA) released its 2019 Annual Energy Outlook (AEO), which contains projections about trends in energy—from the amount of fossil fuels produced and sold, to the growth of renewable energy—out to 2050.

This year, against the backdrop of recent warnings from top scientists about the urgency of climate action, the EIA's projections don't look great. Coal, one of the most carbon-emitting sources of energy, is still projected to provide 17 percent of the United States' electricity in 2050, and that's assuming that no carbon-capture technology has been made mandatory. Natural gas—a fossil fuel that is less carbon-emitting than coal but still a problem for climate change—will increase its share of US electricity production from 34 percent to 39 percent.

These projections are from the EIA's "reference case," which omits any predictions about unplanned policy changes. But they do contain assumptions about how technology will change and the economy will grow. In the EIA's own words (PDF), "The AEO2019 Reference case represents EIA's best assessment of how US and world energy markets will operate through 2050, based on many key assumptions. For instance, the Reference-case projection assumes improvement in known energy production, delivery, and consumption technology trends."

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Coal will remain part of the US grid until 2050, federal energy projections say

EIA’s Annual Energy Outlook isn’t without critics.

Enlarge / GILLETTE, Wyo.: A truck loaded with coal is viewed from the Eagle Butte Coal Mine Overlook which is operated by Alpha Coal. The area is a large producer of coal. Gillette uses the moniker of "The Energy Capital of the Nation." (credit: Matt McClain/The Washington Post via Getty Images)

On Thursday, the US Energy Information Administration (EIA) released its 2019 Annual Energy Outlook (AEO), which contains projections about trends in energy—from the amount of fossil fuels produced and sold, to the growth of renewable energy—out to 2050.

This year, against the backdrop of recent warnings from top scientists about the urgency of climate action, the EIA's projections don't look great. Coal, one of the most carbon-emitting sources of energy, is still projected to provide 17 percent of the United States' electricity in 2050, and that's assuming that no carbon-capture technology has been made mandatory. Natural gas—a fossil fuel that is less carbon-emitting than coal but still a problem for climate change—will increase its share of US electricity production from 34 percent to 39 percent.

These projections are from the EIA's "reference case," which omits any predictions about unplanned policy changes. But they do contain assumptions about how technology will change and the economy will grow. In the EIA's own words (PDF), "The AEO2019 Reference case represents EIA's best assessment of how US and world energy markets will operate through 2050, based on many key assumptions. For instance, the Reference-case projection assumes improvement in known energy production, delivery, and consumption technology trends."

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After a boom year for new natural gas plants, renewables set to retake the lead

As US carbon emissions increase, cutting natural gas will be the next job.

Wind turbines at the Cedar Point Wind Energy Project in Limon, Colorado.

Enlarge / Wind turbines at the Cedar Point Wind Energy Project in Limon, Colorado. (credit: Getty Images)

In 2019, more renewable energy will be added to the grid than fossil fuel-based energy, according to estimates from the Energy Information Administration (EIA). That had been the trend between 2013 and 2017, but last year new natural gas-fired power plants outpaced renewable additions to the grid. As a result, US carbon emissions increased, notably from the power sector, despite the rapid retirement of coal plants and a growing consciousness about the necessity of low-carbon energy.

EIA expects 2019 to be a more modest year for new energy capacity compared to 2018, with only 24 gigawatts (GW) of total capacity additions predicted for 2019 compared to the 34GW of capacity additions predicted for 2018. In 2018, EIA predicted that 21GW of natural gas plants would come online, with roughly 11GW of new renewables coming online, making 2018 the first year since 2013 in which renewables didn't make up the bulk of the new capacity added in the US.

A recent report from the Rhodium Group shows that actual installations in 2018 track with the EIA's 2018 estimate: between January and October 2018, 14.9GW of natural gas capacity were added to the US grid, while only 7.9GW of solar and wind capacity were added. More power plants were likely turned on between October and December, and the ratio of natural gas to renewable installations is comparable.

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As US coal use drops to 1979 levels, EPA may ease rules on new coal plants

New plants not expected to be built, but move sends a signal.

Enlarge / An eastbound Norfolk Southern Corp. unit coal train passes through Waddy, Kentucky. (credit: Luke Sharrett/Bloomberg via Getty Images)

The Trump administration's Environmental Protection Agency (EPA) appears poised to roll back Obama-era rules that effectively prevented new coal plants from opening in the US. The rules required new coal plants to emit no more than 1,400 pounds of CO2 per megawatt-hour (MWh), a constraint that is nearly impossible for new coal generators to meet without carbon-capture technology.

According to anonymous sources speaking to The New York Times, the EPA will announce a rollback of this rule on Thursday, effectively making it possible for energy companies to build new coal plants that emit up to 1,900 pounds of CO2 per MWh, which is more in-line with emissions from modern coal plants without carbon capture.

Although the Obama-era regulations didn't prohibit the construction of new coal plants, opponents of the rules said the carbon-emissions caps were an effective prohibition, because carbon-capture projects are few and far between and are quite expensive to implement.

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International Energy Agency predicts wind will dominate Europe’s grid by 2027

Massive renewable additions will require more grid-stabilizing technology.

A view of wind turbines from the coast

Enlarge / Scroby Sands offshore wind farm, Caister, Great Yarmouth, Norfolk, England. (credit: Photo by: Geography Photos/UIG via Getty Images)

This week, the executive director of the International Energy Agency (IEA) told the Global Wind Summit that wind energy was likely to become Europe's dominant energy source by 2027 and that it would grow from there.

Today, roughly 25 percent of the European Union's power currently comes from nuclear sources, with coal and gas each delivering a little above 20 percent. Wind constitutes 10 percent of the European Union's energy mix.

But by 2027, IEA's forecasts (PDF) put wind just beating all other electricity sources with a 23-percent share of the energy mix. "Other Renewables" like biomass plants contribute a little over 20 percent, gas adds 20 percent, nuclear contributes just a little below 20 percent, and coal declines to just over 10 percent. Solar energy contributes about six or seven percent in the IEA's 2027 scenario.

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Potential buyers for largest coal plant in the Western US back out

Owner of supplying coal mine had been courting buyers.

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Enlarge / Navajo Generating Station and Navajo Mountain. (Photo by: Education Images/UIG via Getty Images) (credit: Getty Images)

Two investment companies that had been negotiating a purchase of the Navajo Generating Station (NGS) outside of Page, Arizona, have decided to end talks without purchasing the coal plant. The 2.25 gigawatt (GW) plant is the biggest coal plant in the Western US, and it has been slated for a 2019 shutdown. That decision came in early 2017, when utility owners of the plant voted to shut it down, saying they could find cheaper, cleaner energy elsewhere.

The 47-year-old plant employs hundreds of people from the Navajo and Hopi tribes in the area. It is also served by Arizona's only coal mine, the Kayenta mine, which is owned by the world's largest private coal firm, Peabody Energy. After the news of NGS' proposed shutdown, Peabody began a search for a potential buyer for the coal plant so as not to lose its only customer.

The Salt River Project, the majority-owner of NGS, published a press release on Thursday saying Peabody Energy retained a consulting firm to identify potential buyers of the massive coal plant. That firm came up with 16 potential buyers who had expressed some interest. Salt River Project says that it hosted numerous tours for prospective buyers and set up meetings with various regulators as well as the Navajo Nation. Ultimately, a Chicago firm called Middle River Power and a New York City firm called Avenue Capital Group (which invests in "companies in financial distress") had entered into negotiations to potentially take over the coal plant and keep it running.

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As coal stalls, Wyoming considers new environmental clean-up rules

Legislators are eager to avoid financial disaster if coal companies default again.

Enlarge / GILLETTE, Wyo.: A truck loaded with coal is viewed from the Eagle Butte Coal Mine Overlook which is operated by Alpha Coal. The area is a large producer of coal. Gillette uses the moniker of "The Energy Capital of the Nation". (Photo by (credit: Matt McClain/The Washington Post via Getty Images)

On Wednesday, Wyoming's Land Quality Advisory Board voted to limit so-called "self-bonding" in the state, a practice that allows coal and other mining companies to avoid putting up any collateral to reclaim land when the company is done with the mine. The new proposed rules will go through a public comment period and then need to be signed by the governor of the state to take effect, according to the Casper Star-Tribune.

The board's passage of the proposed rules is somewhat surprising in a coal-heavy state, because it could potentially raise the cost of coal mining in Wyoming for some companies. However, there is political support for more stringent environmental rules after a number of coal companies filed for bankruptcy in recent years. Although no companies ended up abandoning mine cleanup to the state, the specter of hundreds of millions of dollars of cleanup in the event of another coal downturn has left regulators eager to limit how much damage the state could be on the hook for. The five-person advisory board voted 4-1 in favor of limiting self-bonding. The board member who voted against limits to self-bonding works for Peabody Energy, a major coal producer in the state.

The limits wouldn't do away with self-bonding in Wyoming. Instead, to qualify for self-bonding, a coal company would have to have a strong credit-rating and would be expected to run the mine for at least five more years. The Star-Tribune notes that credit ratings for coal firms also factor in the health of the market, so the state of Wyoming wouldn't have to independently evaluate the larger economic risks to a mine going under.

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US energy agency: Sorry coal, natural gas is having another record summer

Coal’s demise can’t be stopped, but US will still increase carbon emissions.

Enlarge / FORT WORTH, Texas: The Barnett Shale Gas field at dusk, February 27, 2006. XTO Energy Inc. is extracting natural gas at this facility. (credit: J.G. Domke/Bloomberg via Getty Images)

Between 2018 and 2020, natural gas is expected to continue to eat away steadily at coal's share of the US energy mix, barring any regulatory intervention from the federal government.

The competition between natural gas and coal is especially fierce this summer: the former could set a record in terms of its contribution to overall US energy generation.

Another interesting prediction about fossil fuels: in 2018, the average price of a gallon of gasoline has been significantly higher than the year before, but that may not be great news for the oil industry, because drivers are already responding to higher prices. The amount of gas drivers will purchase in 2018 is expected to fall year over year for the first time since 2012. The contraction amounts to 10,000 barrels of oil per day not sold—a small change for the US economy but potentially a harbinger of things to come.

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