Natural gas to fill coal gap

March 20, 2014 | By

Coal retirements as a result of U.S. Environmental Protection Agency (EPA) regulations will leave a gaping hole in the U.S. energy supply over the next five years and beyond, but this gap is expected to be filled by natural gas-fired plants, according to predictions from ICF International.

Credit: Mazbln/Wikimedia Commons

Coal retirements continue to be driven by regulations, with the EPA expected to release a proposal in June regarding CO2 emissions from existing power plants. As a result of this and other regulations, U.S. coal plants could retire approximately 65 GW by 2020, according to ICF, and natural gas-fired units will fill the gap.

"Regulation of CO2 from existing sources will cause companies to consider incremental retirements and investments while recent weather and the resulting gas price response make them reconsider past retirements," said Chris MacCracken, principal for ICF International.

Building on its Mercury and Air Toxics Standards and expectations for final ash and water intake structure rules, EPA's new rule could lead to incremental announcements over the next five years.

In the meantime, cold weather and increasing natural gas prices are giving coal consumption a boost. However, over the next five years ICF expects coal consumption to remain flat with gas prices expected to remain competitive for the next several years and electric load growth at moderate levels in many areas. A gradual decline is expected, beginning in 2020.

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