By Mark Wilcox
Information Administration predicts that natural gas will dethrone King Coal by 2035, and a number of market forces are at work that may assure that ascension.
Coal through the first three quarters of 2014 provided roughly 51 percent of the nation’s electricity, and Wyoming supplies about 40 percent of that coal. Comparatively, natural gas through the period fueled about 20 percent of utility generation.
In other words, the transition hasn’t happened just yet. However, 45 gigawatts of coal-fired capacity is set to retire in the next two years, and most of it will likely be replaced by natural gas generation. In Wyoming, the 132-megawatt Cheyenne Prairie Generating Station recently went online, replacing 82 megawatts of “older, coal-fired generation that cannot be economically retrofitted to meet new EPA air emissions regulations and must be retired,” according to a company release.
“We’re heard for some time that this conversion from coal to natural gas in the U.S. power generation fleet was coming,” said Don Collins, Western Research Institute’s CEO in an email to industry insiders he shared with the Business Report. He then assembled a list of changes that could make it more difficult for coal to compete against natural gas.
Among those changes are EPA regulations that will require significant reductions in emissions of mercury, acid gases, toxic metals, or MATS as well as carbon dioxide. The rule for MATS is expected to force 90 percent of coal closures within a year of enforcement, or by 2016. The carbon dioxide rule has yet to be finalized, but may force another 50 gigawatts of coal-fired closures by 2020.
Additionally, Collins said utilities are beginning to scale and build their power plants with a different mentality, especially in rural areas. He said that at the National Rural Electric Cooperative Association’s recent conference, he learned that many rural co-ops are beginning to install farms of reciprocating engine generators operating on natural gas.Read more