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Coal-fired generation in US to fall by 1/4 by 2020

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As Australia looks to protect the interests of its coal-fired generation industry by scaling back its renewable energy target, new research shows that coal-fired generation in the US is likely to fall by one quarter between now and 2020 – as a result of state-based renewable targets and tight emission rules.

The research by analysts at Alliance Bernstein suggests that nearly 230 million tonnes of coal will be removed from US coal generation by 2020 – the equivalent of Australia’s current level of coal exports.

This reduction is caused mostly as a result of the Obama Administration’s new emissions controls, but also because of the impact of the renewable energy targets in place in 29 states.

The Bernstein report – “The coming sea change in coal and gas sector demand” – predicts a huge shift from coal to gas fired generation and renewables in the final years of the decade.

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The 29 states with renewable targets – they account for two thirds of the country’s total demand – will mean that another 165 million MWh of non-hydro renewable energy production will need to be in production 2020.

That will be in addition to the 130 million MWh of output added from 2008-2013. Combined that is more than Australia’s entire grid.

Bernstein says these mandates would require around 7 per cent of U.S. retail electricity sales to be supplied by non-hydro renewable resources in 2015 and about 10 per cent in 2020.

The fossil fuel lobby has launched intense campaigns in state legislatures to try and have the renewable energy targets rescinded. All have failed however, and the only jurisdiction where the fossil fuel lobby appears to have succeeded in convincing the government to cut the ambition of renewable energy targets is in Australia.

The amount of coal being used for electricity generation in the US is expected to fall by about 25 million tonnes a year by 2020 as a result of these renewable targets.

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The next big impact is the EPA’s Mercury and Air Toxics Standards (MATS) which will come into effect in 2015 drive the almost immediate retirement of around 50 GW of coal fired capacity generating 180 million MWh annually.

The other key measure is the EPA’s proposed CO2 regulations that will come into effect over 2016-2018. This will mean the aggregate decline in utility coal demand through the end of the decade could rise to 228 million tons, or 25% of U.S. coal production.

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  • juxx0r

    We should get Mercury and Air Toxics Standards (MATS) in Australia.

  • Stan Hlegeris

    Can anyone point me to some research as to how much Mercury is released by cola-fired plants in Australia? Thanks!

  • David K Clarke

    Thanks for this Giles. You are a never-ending source of valuable information!