Electricity: Significant Changes Are Expected in Coal-Fueled Generation, but Coal is Likely to Remain a Key Fuel Source

Government Accountability Office
http://www.gao.gov/products/GAO-13-72

[From Summary] … In total, GAO identified 15 to 18 percent of coal-fueled capacity that power companies either plan to retire or that GAO estimated may retire–an amount consistent with the forecasts GAO reviewed…. According to stakeholders and three long-term forecasts GAO reviewed, coal is generally expected to remain a key fuel source for U.S. electricity generation in the future, but coal’s share as a source of electricity may continue to decline. For example, in its forecast based on current policies, the Energy Information Administration (EIA) forecasts that the amount of electricity generated using coal is expected to remain relatively constant through 2035, but it forecasts that the share of coal-fueled electricity generation will decline from 42 percent in 2011 to 38 percent in 2035. Available information suggests that the future U.S. use of coal may be determined by several key factors, including the price of natural gas and environmental regulations. For example, available information suggests that the price of coal compared with other fuel sources will influence how economically attractive it is to use coal to generate electricity. EIA assessed several scenarios of future fuel prices and forecasts that coal’s share of U.S. electricity generation will fall to 30 percent in 2035 if natural gas prices are low or 40 percent if natural gas prices are high. In addition, some stakeholders told GAO that the future use of coal could be significantly affected if existing environmental regulations become more stringent or if additional environmental regulations are issued. For example, EIA forecasts that two hypothetical future policies that reduce carbon dioxide emissions from the electricity sector by 46 percent and 76 percent would result in coal’s share of U.S. electricity generation falling to 16 and 4 percent in 2035, respectively.

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