Things are not looking good for Big Coal in the US.
Globally 42% of all coal plants are losing money. In the US that is no different, especially when take into account the subsidies from the government. Recent numbers on coal capacity indicate a decline in 2018.
Power companies closed 14 gigawatts of coal capacity across 20 different plants in 2018—amounting to some 5% of the US coal fleet. And while coal exports were up, the long-term trend of falling consumption at home does not bode well for the prospects of coal, especially if similar trends pick up in US coal’s main export markets.
Utilities companies are thinking about the future. It seems that the utilities have embraced a carbon-less future and proposed drastic emissions reductions. That is a huge turnaround in thinking.
Given that we’ve seen even more dramatic falls in coal’s fortunes in the UK, Spain and elsewhere—and given that these closures are persisting despite a pro-coal regime in DC—I would argue that whatever short-term silver linings coal companies see in exports may be fragile to say the least once decarbonization really gathers pace abroad.
Of course, a drop in coal capacity means little if emissions are rising elsewhere—as indeed they are for transportation. But once electrification of cars, buses, trucks, boats and bikes starts to really take off, the fall in coal capacity should start to pay double dividend in terms of overall emissions reductions.
The US has eleven years to transform our economy and facilitate the energy transition. The continued fall in coal capacity is an essential step in getting us to where we need to be. Now it’s time to pick up the pace.
To learn more on the US energy transition this is a recommended read:
Categories: Economic, Energy, Environmental
this 5%deduction should serve as a warning to businesspeople and investors: the future of coal is looking bleak; with the threat of global warming making countries to find a common ground to fight it, those interested in coal should start to — according to your post — “embrace a carbon-less future and propose drastic emissions reductions”