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Fossil fuel plant retirements are slowing down, and projected load growth is to blame.
To fully decarbonize the electricity system will require more than just the rapid deployment of non-carbon-emitting generation capacity, plus the transmission necessary to get that electricity to where it needs to go. It will also require that our existing stock of electricity generation — which is largely natural gas- and coal-powered — get mostly mothballed. So far, this process has been proceeding briskly. Renewable deployment is on the way up and is projected to accelerate, and older electricity generation was sliding quickly but gracefully into retirement — until recently.
Retirements of existing generation have slowed down dramatically in the first half of this year, which is on pace to be the slowest for existing generation retirements since 2011, according to new data from the Energy Information Administration.
In the first half of the year, some 5.1 gigawatts of generating capacity have been retired, and another 2.4 gigawatts are scheduled to be retired by year’s end, for a projected total of 7.5 retired gigawatts. From 2004 to 2023, by contrast, just over 12 gigawatts of capacity were retired each year on average, with almost 15 gigawatts retired per year this decade. Since 2022, according to EIA data, over 90% of retired capacity has been coal or natural gas.
What’s behind the slowdown? “Reliability is threatened because the grid conditions are tightening,” Douglas Giuffre, executive director of gas, power and renewables analysis at S&P Global Commodity Insights, explained in an email. “This is partly due to the recent pace of coal and natural gas retirements in the U.S., which worked off some of the excess capacity in power markets. Now we are seeing tighter reserve margins, and a relatively thin pipeline of new gas-fired projects that can come online quickly.” That’s especially concerning for utilities at a time when projected electricity demand is way, way up.
The wave of retirements was a national phenomenon, often having nothing to do with state-level plans to decarbonize. Coal and gas were being retired so steadily over the past 20 years not just because plants were aging, but also because power use was essentially flat from the early 2000s through, essentially, yesterday. This meant that older plants — especially dirty coal plants — became uneconomic to run, especially as natural gas prices began to fall.
Now, we are in a completely different world. Electricity use is forecast to start growing again, thanks to a buildout of new data centers and manufacturing, plus the ongoing electrification of automobiles and home heating and cooling.
The Southeast offers an example of how these trends have played out on the ground. In December 2020, the Mississippi Public Service Commission determined that the state had “excess reserves … largely due to decreases in projected load” and ordered a 950 megawatt reduction in generating capacity by Mississippi Power by 2027. A consulting firm hired by the commission determined that Plant Daniel, a coal plant, was “relatively inefficient compared to other available resources;” a few months later, the utility said it would decommission Plant Daniel by 2027.
Then Georgia Power, the utility that covers most of the state (and, like Mississippi Power, a subsidiary of Southern Company), rushed out a new three-year plan for its future power usage less than a year after finalizing its old one. Its demand forecast through the end of the decade had jumped from 400 megawatts to 6,600 megawatts, the result of a projected boom in data center construction.
“They came in with a preselected list of ways it wanted to meet that power need,” including buying power from Plant Daniel and new gas, Bob Sherrier, a staff attorney at the Southern Environmental Law Center, told me. Georgia Power told the state’s utility commission that to respond to growing demand it would need to extend contracts with its sister utility in Mississippi — which meant not only that Daniel would remain open for at least another year — and build new new plants that could run on gas or diesel, plans for which regulators approved on Tuesday. The utility also hinted that its existing plans to euthanize, for the most part, its coal-fired generation fleet by the end of 2028 were likely to be revised.
“To meet that projected need, the utilities are reverting to what they know, which is fossil fuels,” Sherrier said.
In vertically integrated markets, where utilities own generating assets and sell power to customers, environmentalists have seen delayed retirements and the building of new fossil plants as examples of utilities slipping into their comfort zone, building and operating expensive projects instead of developing or procuring renewables to handle rising demand.
But it's not just in vertically integrated markets where fossil retirements are being delayed. In Maryland, for instance, Brandon Shores, a coal-fired power plant that was scheduled to close in 2025, is staying open because PJM Interconnection, the regional electricity market, determined that a plan to replace it with battery storage was not a “realistic option at present” nor “technically viable to resolve the reliability violations or avoid the need for an RMR agreement at this time,” PJM president Manu Asthana said in a letter to Paul Pinsky, the director of the Maryland Energy Administration. The transmission investments required to make up the difference, meanwhile, would take several years.
Along with the neighboring Wagner plant, which burns a mix of coal, oil, and natural gas, Brandon Shores will likely stay open more than three years past its planned retirement date thanks to what’s known as a “reliability must run” contract, which “would put Maryland ratepayers on the hook for over $600 million dollars in out-of-market payments,” according to a letter written by several Maryland congressional representatives to PJM.
Environmental advocates have blamed PJM for not doing enough proactive transmission planning to account for predictable and scheduled plant retirements.
The slowing retirements mean that emissions from the electricity sector, which have been falling since the mid-2000s (with occasional bumps up as the economy has recovered from downturns), are expected to plateau over the next year or so. EIA forecasts show carbon dioxide emissions from electricity as essentially flat from 2023 to 2025, with increased natural gas emissions essentially offsetting falling coal emissions.
There is a bright side to the data, however. So far this year, the U.S. has installed just over 20 gigawatts of new generation, 80% of which has been solar and battery storage, including a 600-plus megawatt projects in Nevada and Texas. If added generation comes on in the second half of this year as planned, the EIA projects we’ll have 15 gigawatts of battery storage by year’s end. Along with the large and growing solar generation in states like California, Nevada, and Texas, the U.S. is getting closer to a grid that can, at least, run without carbon emissions day or night.
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And more of this week’s top renewable energy fights across the country.
1. Otsego County, Michigan – The Mitten State is proving just how hard it can be to build a solar project in wooded areas. Especially once Fox News gets involved.
2. Atlantic County, New Jersey – Opponents of offshore wind in Atlantic City are trying to undo an ordinance allowing construction of transmission cables that would connect the Atlantic Shores offshore wind project to the grid.
3. Benton County, Washington – Sorry Scout Clean Energy, but the Yakima Nation is coming for Horse Heaven.
Here’s what else we’re watching right now…
In Connecticut, officials have withdrawn from Vineyard Wind 2 — leading to the project being indefinitely shelved.
In Indiana, Invenergy just got a rejection from Marshall County for special use of agricultural lands.
In Kansas, residents in Dickinson County are filing legal action against county commissioners who approved Enel’s Hope Ridge wind project.
In Kentucky, a solar project was actually approved for once – this time for the East Kentucky Power Cooperative.
In North Carolina, Davidson County is getting a solar moratorium.
In Pennsylvania, the town of Unity rejected a solar project. Elsewhere in the state, the developer of the Newton 1 solar project is appealing their denial.
In South Carolina, a state appeals court has upheld the rejection of a 2,300 acre solar project proposed by Coastal Pine Solar.
In Washington State, Yakima County looks like it’ll keep its solar moratorium in place.
And more of this week’s top policy news around renewables.
1. Trump’s Big Promise – Our nation’s incoming president is now saying he’ll ban all wind projects on Day 1, an expansion of his previous promise to stop only offshore wind.
2. The Big Nuclear Lawsuit – Texas and Utah are suing to kill the Nuclear Regulatory Commission’s authority to license small modular reactors.
3. Biden’s parting words – The Biden administration has finished its long-awaited guidance for the IRA’s tech-neutral electricity credit (which barely changed) and hydrogen production credit.
A conversation with J. Timmons Roberts, executive director of Brown University’s Climate Social Science Network
This week’s interview is with Brown University professor J. Timmons Roberts. Those of you familiar with the fight over offshore wind may not know Roberts by name, but you’re definitely familiar with his work: He and his students have spearheaded some of the most impactful research conducted on anti-offshore wind opposition networks. This work is a must-read for anyone who wants to best understand how the anti-renewables movement functions and why it may be difficult to stop it from winning out.
So with Trump 2.0 on the verge of banning offshore wind outright, I decided to ask Roberts what he thinks developers should be paying attention to at this moment. The following interview has been lightly edited for clarity.
Is the anti-renewables movement a political force the country needs to reckon with?
Absolutely. In my opinion it’s been unfortunate for the environmental groups, the wind development, the government officials, climate scientists – they’ve been unwilling to engage directly with those groups. They want to keep a very positive message talking about the great things that come with wind and solar. And they’ve really left the field open as a result.
I think that as these claims sit there unrefuted and naive people – I don’t mean naive in a negative sense but people who don’t know much about this issue – are only hearing the negative spin about renewables. It’s a big problem.
When you say renewables developers aren’t interacting here – are you telling me the wind industry is just letting these people run roughshod?
I’ve seen no direct refutation in those anti-wind Facebook groups, and there’s very few environmentalists or others. People are quite afraid to go in there.
But even just generally. This vast network you’ve tracked – have you seen a similar kind of counter mobilization on the part of those who want to build these wind farms offshore?
There’s some mobilization. There’s something called the New England for Offshore Wind coalition. There’s some university programs. There’s some other oceanographic groups, things like that.
My observation is that they’re mostly staff organizations and they’re very cautious. They’re trying to work as a coalition. And they’re going as slow as their most cautious member.
As someone who has researched these networks, what are you watching for in the coming year? Under the first year of Trump 2.0?
Yeah I mean, channeling my optimistic and Midwestern dad, my thought is that there may be an overstepping by the Trump administration and by some of these activists. The lack of viable alternative pathways forward and almost anti-climate approaches these groups are now a part of can backfire for them. Folks may say, why would I want to be supportive of your group if you’re basically undermining everything I believe in?
What do you think developers should know about the research you have done into these networks?
I think it's important for deciding bodies and the public, the media and so on, to know who they’re hearing when they hear voices at a public hearing or in a congressional field hearing. Who are the people representing? Whose voice are they advancing?
It’s important for these actors that want to advance action on climate change and renewables to know what strategies and the tactics are being used and also know about the connections.
One of the things you pointed out in your research is that, yes, there are dark money groups involved in this movement and there are outside figures involved, but a lot of this sometimes is just one person posts something to the internet and then another person posts something to the internet.
Does that make things harder when it comes to addressing the anti-renewables movement?
Absolutely. Social media’s really been devastating for developing science and informed, rational public policymaking. It’s so easy to create a conspiracy and false information and very slanted, partial information to shoot holes at something as big as getting us off of fossil fuels.
Our position has developed as we understand that indeed these are not just astro-turf groups created by some far away corporation but there are legitimate concerns – like fishing, where most of it is based on certainty – and then there are these sensationalized claims that drive fears. That fear is real. And it’s unfortunate.
Anything else you’d really like to tell our readers?
I didn’t really choose this topic. I feel like it really got me. It was me and four students sitting in my conference room down the hall and I said, have you heard about this group that just started here in Rhode Island that’s making these claims we should investigate? And students were super excited about it and have really been the leaders.