Expansion and shutdown of power generation capacities in 2021 and the long-term change in the electricity mix.
By Wolf Richter for WOLF STREET.
In 2021, developers and power plant owners plan to commission 39.7 gigawatts (GW) of new electricity generation capacity and shut down 9.1 GW of electricity generation capacity, which corresponds to a net capacity increase of 30.6 GW, according to the EIA today. 70% of the capacity expansions will come from wind and sun, 16% from natural gas and 3% from a nuclear reactor. These are utility-scale power generators that exclude solar roofs. 86% of retirements will be coal and nuclear.
Electricity generation in the US has not been growing since 2006 as the efficiency of electrical appliances (LED lights, appliances, air conditioners, etc.) and the continued relocation of manufacturing have kept consumption roughly stable despite the growth of the economy and population. But all the hell broke loose is how that energy is generated (data on the EIA).
The coal-fired power plants have collapsed by over 60% in 12 years, from an average of 169 GW hours per month in 2008 to an average of 65 GW hours per month in the last 12 months, according to the EIA. It rose from “King Coal” in 2008 by a large margin (black line in the graphic below) to third place after it had shot up in 2015 due to increasing natural gas production (green line), as the USA has become the largest NG Producer in the world. Towards the end of 2020, coal even fell under nuclear power (brown line).
In a few years wind and sun (red line) will also be blown through coal. With wind and sun, the great lure for power producers is that the “fuel” is free and that there will be no future price increases for “fuel” regardless of what inflation will cause:
The railways have long lamented the decline of coal. According to the Association of American Railroads, coal truckloads fell 24.6% in 2020 compared to 2019, to just 3.01 million truckloads. This is the lowest annual total ever recorded.
Decommissioning of power plants in 2021.
In the last five years since 2016, a total of 48 GW coal-fired power plants have been shut down. In 2021, retirement will slow to 2.7 GW of coal-fired power, bringing the six-year total output to over 50 GW. In 2020, the weighted average age of retirement is over 51 years.
Four states – Maryland, Florida, Connecticut, and Wisconsin – account for nearly two-thirds of the capacity outages that have been shut down. In some states, including California, coal capacity has already reached zero. Retirement from coal in 2021 will account for 30% of total retirement.
Power producers plan to shut down 5.1 GW of nuclear capacity, or 56% of total decommissioning and 5% of US nuclear capacity. Exelon plans to shut down two nuclear power plants, each with two reactors, in Dresden and Byron, Illinois, for a total of 4.1 GW. and Entergy plans to shut down a reactor (1.0 GW) at the Indian Point facility in New York.
“The decline in US nuclear capacity is due to historically low natural gas prices, limited growth in electricity demand and increasing competition from renewable energy sources,” the EIA said in its report today.
Nuclear and coal account for 86% of closures in 2021. The remaining 14% of the shutdowns include 0.8 GW of petroleum capacity (Possum Point in Virginia), 0.25 GW of natural gas capacity, and 0.14 GW of a 34 year old biomass incinerator in Southport, North Carolina (map above EIA):
New power plants in 2021.
Power plant owners are planning to start commercial operations of new power plants with a total power generation capacity of 39.7 GW this year, the EIA reported. Wind and sun together account for 70% of the capacity expansion.
The EIA also includes battery storage on a supply scale, as they can supply the grid with electricity, but obviously do not “generate” electricity. The battery additions in 2021 are expected to reach 4.3 GW, quadrupling the 2020 additions. These battery systems are often combined with renewable power plants, such as the world’s largest solar-powered battery (409 MW) at the Manatee Solar Energy Center in Florida, which is expected to start operating this year.
- Solar photovoltaics, supply scale: 15.4 GW
- Wind: 12.2 GW
- Natural gas: 6.6 GW
- Batteries: 4.3 GW
- Nuclear power: 1.1 GW (new reactor of the Southern Company in the Vogtle plant in Georgia)
- Other: 0.2 GW
The 15.4 GW of solar capacity expansion on a supply scale is a record that exceeds the previous record of 12 GW in 2020. Of this new capacity, 28% will be in Texas, 9% in Nevada and 9% in California. and 7% in North Carolina. This year will also be the first year that PV capacity expansion exceeds wind capacity expansion.
The MSRP, which is not included here, estimates 421 GW of small solar PV capacity, such as B. Dach-Solar, will go into operation in 2021. That would bring the total solar capacity expansion to nearly 20 GW this year.
The 12.2 GW of added wind capacity this year is well below the 21 GW of additional assets in 2020. Over half of this year’s increases will be in Texas and Oklahoma, including the nearly 1.0 GW Traverse wind farm in Oklahoma. Lots of free wind in west Texas, west Oklahoma, and especially the panhandle, and smart people have figured out how to turn that wind into cash.
Of the natural gas-fired capacity expansions of 6.6 GW, 3.9 GW will be natural gas systems with a combined cycle. These combined cycle power plants and cheap natural gas have ruined investments in coal power plants. The efficiency of new combined cycle power plants can exceed 60% and thus far exceed that of coal-fired power plants. Combined power plant technology was put into operation in the nineties.
In a combined cycle power plant, a gas turbine, similar to a jet engine, burns the gas and drives a generator. The hot exhaust is then used to create high pressure steam that drives a steam turbine that drives another generator. In contrast, a coal-fired power plant only generates high pressure steam to power a steam turbine. Add cheap natural gas to the mix, and coal – even coal, which has been so cheap in recent years it bankrupted all the big miners – has not been able to compete in the US for over a decade. For this reason, investments in expanding coal capacity have fallen by the wayside.
Long term structural problems have long haunted gasoline, jet fuel, and distillate consumption. Then came the pandemic. Read … Update on WTF Gasoline and Jet Fuel Consumption Breakdown: The Holiday Season
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