by Wolf Richter, Wolf Street:
Electricity generating capacity additions & retirements in 2021, and the long-term change in the power mix.
In 2021, developers and power plant owners plan to bring 39.7 gigawatts (GW) of new electricity generating capacity on line, and retire 9.1 GW in generating capacity, for a net increase in capacity of 30.6 GW, according to the EIA today. 70% of the capacity additions will be from wind and solar, 16% will be from natural gas, and 3% will be from a nuclear reactor. These are utility-scale power generators and exclude rooftop solar. Of the retirements, 86% will be coal and nuclear.
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Electricity generation in the US has been a no-growth business since 2006, as efficiencies in electrical equipment (LED lights, appliances, air conditioning, etc.) and further offshoring of manufacturing have kept consumption roughly stable despite growth in the economy and population. But where all heck has broken loose is in how this power is being generated (data via the EIA).
Coal-fired power generation has collapsed by over 60% in 12 years, from around 169 GW hours per month on average in 2008 to 65 GW hours per month on average over the past 12 months, according to data from the EIA. It went from “King Coal” by a wide margin in 2008 (black line in the chart below) to #3, after surging natural gas-fired power generation (green line) blew by it in 2015 as the US has become the largest NG producer in world. And toward the end of 2020, coal fell even below nuclear power (brown line).
In a few years, wind and solar combined (red line) will blow by coal as well. With wind and solar, the big enticement for power generators is that the “fuel” is free and that there won’t be any “fuel” price increases in the future, no matter what inflation will do:
The decline of coal has long been lamented by railroads. In 2020, according to the Association of American Railroads, coal carloads plunged by 24.6% from 2019, to just 3.01 million carloads, the lowest annual total on record.
Power plant retirements in 2021.
Over the past five years since 2016, a total of 48 GW of coal-fired capacity was retired. In 2021, retirements will slow to 2.7 GW of coal-fired capacity, bringing the six-year total to over 50 GW. In 2020, the weighted average age of the retirements is over 51 years.
Four states – Maryland, Florida, Connecticut, and Wisconsin – account for nearly two-thirds of the coal-fired capacity retirements. Coal-fired capacity has already reached zero in some states, including California. Coal retirements in 2021 will account for 30% of total retirements.
Power generators are planning to retire 5.1 GW of nuclear capacity, or 56% of total retirements, and 5% of US nuclear generating capacity. Exelon is planning to retire two nuclear plants with two reactors each in Dresden and Byron, Illinois, for a total of 4.1 GW; and Entergy is planning to retire one reactor (1.0 GW) at the Indian Point plant in New York.
“The decrease of U.S. nuclear power generating capacity is a result of historically low natural gas prices, limited growth in electricity demand, and increasing competition from renewable energy,” the EIA said in its report today.
Nuclear and coal combined account for 86% of the retirements in 2021. The remaining 14% of retirements include 0.8 GW of petroleum-fired capacity (Possum Point in Virginia), 0.25 GW of natural gas-fired capacity, and the 0.14 GW of a 34-year-old biomass waste-to-energy plant in Southport, North Carolina (map via EIA):
New power plants in 2021.
Power plant owners are planning to start commercial operations at new power plants with a total of 39.7 GW of electricity generating capacity this year, the EIA reported. Wind and solar combined account for 70% of the capacity additions.
The EIA also includes utility-scale battery storage in the mix as they can supply power to the grid, but obviously do not “generate” electricity. Battery additions in 2021 are expected to reach 4.3 GW, quadruple the 2020 additions. These battery systems are often paired with renewable power plants, such as the world’s largest solar-powered battery (409 MW) at Manatee Solar Energy Center in Florida, expected to begin operations this year.
- Solar photovoltaic, utility scale: 15.4 GW
- Wind: 12.2 GW
- Natural gas: 6.6 GW
- Batteries: 4.3 GW
- Nuclear: 1.1 GW (Southern Company’s new reactor at its Vogtle plant in Georgia)
- Other: 0.2 GW
The 15.4 GW of utility-scale solar capacity additions are an all-time record, beating the prior record of 12 GW set in 2020. Of that new capacity, 28% will be in Texas, 9% in Nevada, 9% in California, and 7% in North Carolina. This year will also be the first year that PV capacity additions will exceed wind power capacity additions.
Not included here, the EIA estimates that 4.1 GW of small-scale solar PV capacity, such as rooftop solar, will come online in 2021. This would bring the total solar capacity additions this year to nearly 20 GW.
The 12.2 GW of wind power capacity additions this year are well below the 21 GW of additions in 2020. Over half of this year’s addition will be in Texas and Oklahoma, including the nearly 1.0 GW Traverse windfarm in Oklahoma. Lots of free wind in West Texas, western Oklahoma, and the Panhandle in particular, and smart folks have figured out how to turn this wind into cash.
Of the 6.6 GW natural gas-fired capacity additions, 3.9 GW will be combined-cycle natural gas plants. These combined-cycle plants and cheap natural gas are what has been killing investment in coal power plants. The efficiency of new combined cycle plants can exceed 60%, far higher than coal plants. The combined-cycle technology entered utility scale operations in the 1990s.