Total fossil fuel use in the power sector dropped to its lowest level since 1994, the U.S. Energy Information Administration reported this week.
Equally remarkable, the EIA — the federal agency responsible for energy statistics — further notes that coal for electricity is at a 36-year low. It stated: “In 2017, coal consumption by the electric power sector reached its lowest level since 1982.”
Despite President Trump’s repeated promises to resuscitate the collapsing U.S. coal industry, the long-term trends cannot be reversed. Indeed, “the economics of coal have gotten worse” since Trump took office, as one leading energy analyst said earlier this month.
Already more coal capacity was retired in the first 45 days of 2018 than in any of the first three years of the Obama administration. And energy-industry analysts project a faster than expected pace of coal plant retirements in the coming years.
Coal has three massive economic problems even if we set aside its unhealthy and climate-destroying pollution.
First, energy efficiency has been incredibly successful at keeping U.S. electricity demand flat for over a decade — a trend that is expected to continue for the foreseeable future. That means generation gains in one power source come at the expense of another.
Second, the prices for renewable power have been plummeting so fast that building and running new wind and solar farms is now cheaper than just running existing coal plants in many places.
Third, cheap shale gas has replaced coal as the go-to power source that is not only affordable but much more flexible, and can ramp up or down as needed.
Whereas natural gas had been displacing most of the coal lost this decade, renewables have been battling gas as the cheapest replacement in the last couple of years. In fact, in 2017, renewables and energy efficiency improvements were the primary driver of the drop in U.S. fossil fuel consumption and CO2 in the power sector.
As EIA noted this week, while coal use for power dropped again in 2017, “petroleum consumption in the power sector was the lowest on record, based on data since 1949.” At the same time, the U.S. only saw “a slightly offsetting increase in the use of natural gas.”
Renewables, on the other hand, soared. Indeed, the question for the future is not whether coal is coming back — it isn’t. The question is simply how fast it will continue to decline and which power source will replace more coal — natural gas or renewables.