In 2014, the U.S. Energy Information Administration (EIA) released its Annual Energy Outlook, which included predictions that power plants with a total capacity of 60 gigawatts (GW) would retire by 2020. The EIA reports that many coal-fired power plants are struggling due to economic pressure from more competitive natural gas prices and slow growth in electricity demand. In addition, new air quality standards that require significant reduction in mercury, acid gas and toxic metal emissions are set to take effect this month.

Old, dirty power plants must be retrofitted with scrubbers in order to comply with the Mercury and Air Toxics Standards (MATS). The cost to comply with these new standards becomes prohibitive for inefficient plants, especially those in operation for half a century or longer. The cheaper option for energy companies is simply to decommission old, dirty coal plants.

What does this mean?

From the local economy and environment to meeting national greenhouse gas emission reduction goals and U.S. energy strategy, the shift away from coal to cleaner-burning or renewable energy sources of power generation has far-reaching effects.

Shift from blue to green collar jobs

The closing of so many coal-fired power plants has many implications. Most certainly, these closures will impact the communities in which the plants are located as power plant workers are transferred or laid off. Though the closures reduce overall grid capacity, they leave a vacuum that must be filled. The solution would be to replace these coal-fired plants with cleaner generation sources, such as natural gas, nuclear, solar or wind power. In turn, these new energy sources create new jobs.

Falling energy prices

Electricity consumers could see more affordable energy pricing as old coal plants retire and are replaced by cheaper energy sources. The price of natural gas is one reason that coal is no longer competitive. Natural gas is also a cleaner burning fuel, so it can be less expensive for natural gas-fired plants to comply with emission regulations than to retrofit an old coal plant. However, natural gas is not a long-term solution as, like coal, it is a finite resource and emits greenhouse gases when combusted. In the short-term, natural gas can be a transition fuel to help meet emission reduction goals while the U.S. builds out greener generation solutions.

Environmental impacts

Additionally, coal-fired plant closures can be a boon to the local environment. Dirty power plant retirement reduces carbon dioxide emissions and improves air and water quality as well as public health in the immediate vicinity of the closed plant. Replacing coal-fired generation with renewable energy further helps the environment and overall public health. It is estimated that current renewable energy technology could supply 80% of total U.S. electricity generation by 2050 – reducing carbon emissions from power plants by 80% and reducing water use by 50%.

National emission reductions

This shift from coal to natural gas and finally to renewable energy sources also helps the U.S. meet greenhouse gas (GHG) emission reduction goals. In 2009, the White House announced a goal to reduce GHG emissions by 17% of 2005 levels by the year 2020. As of 2012, the U.S. was on track to achieve reductions of 16.3%. Retiring the most polluting power generation plants and replacing them with cleaner-burning natural gas or green energy would help to drive down GHG emissions and help the nation to meet its 2020 goal.

While market forces and regulatory changes are driving the closure of coal-fired power plants, it is a change that creates new opportunities for growth in many ways – clean energy development, green-collar job creation and a healthier environment.

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