Power Prices, Regulation, Regulation  -  February 15, 2017

EIA: Coal will again be country's largest source of electric generation without Clean Power Plan

Chart source: U.S. Energy Information Administration, Annual Energy Outlook 2017

If the U.S. EPA's Clean Power Plan is not implemented, coal will again become the leading source of electricity generation by 2019, and retain that position through 2032, according to projects from the Energy Information Administration. 

The Clean Power Plan, which is currently tied up in U.S. courts and generally considered to be on life support under the presidential administration of Donald Trump. Trump has previously called climate change a hoax, and promised during his campaign to withdraw U.S. support of the Paris climate agreement and dismantle the Clean Power Plan. 

Although many have argued that the transition to lower carbon fuel sources is too far along to be materially reversed by policy changes, the EIA noted in a Feb. 14 blog post that without the CPP,  there is less incentive to switch from carbon-intensive coal to less carbon-intensive natural gas or carbon-free fuels such as wind and solar.

Per the EIA's Annual Energy Outlook 2017: 

In the scenario where the Clean Power Plan is not implemented, coal again becomes the leading source of electricity generation by 2019 and retains that position through 2032, longer than in the Reference case, which includes the Clean Power Plan. Electricity generation from renewable sources remains below coal-fired electricity generation through 2040. Fewer coal plants are retired, and as a result, natural gas and renewable capacity additions are lower compared with the Reference case.Policy, of course, is not the only factor that impacts the mix of fuels used to generate electricity; natural gas prices, changes in technology and other market forces also play a role and are considered in the EIA's forecasting. 

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