08/23/2012 | Editor: Dominik Stephan
The US will retire one sixth of its coal fired power plants until 2020, figures of the U.S. Energy Information Administration (EIA) show. The generation capacity will in part be replaced by cheap natural gas.
Washington DC/USA – The EIA believes that coal fired power plant with a total generating capacity of 49 gigawatts will be idled during the next decade. Most of these generators are older, inefficient units primarily in the Mid-Atlantic, Ohio River Valley, and the Southeastern U.S. where excess electricity generation capacity currently exists, the EIA states.
This development is driven by a number of factors: The recent boom in shale gas, higher coal prices, a slowing economic development and the implementation of environmental regulations are regarded as the main reasons behind this trend.
The low prices for natural gas in the US have made coal fired power plants less competitive, industry insiders believe. As natural gas is often a marginal fuel for power generation, lower gas prices also tend to reduce the overall wholesale electricity price, which drastically affects the revenues for other energy sources.
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