Coal has been used to generate electricity from the beginning of the electric grid. Pearl Street Station, the first commercial central power plant, used coal. The technology for generating electricity was quickly sent West. The first commercial electric grid outside of New York was in the Northwest. Hydroelectric generation at Willamette Falls in Oregon City was used to light the streets of Portland. In the years between 1882 and 2019, the electric grid expanded from 14 miles to thousands of miles of wire. And as the wires snaked out through the West, coal and water were the primary fuels used to generate the electricity needed to support the grid.
But generating electricity from coal, at least in the West, may become a thing of the past. And utilities' plans indicate the decline of coal generation in the West will be rapid over the next decade.
Retirements have been expected
We've been talking about coal retirements as a means to reduce greenhouse gas emissions for a long time. In 2010, Portland General Electric announced the retirement of the Boardman coal plant by 2020. In 2011, Washington passed legislation retiring the Centralia coal plant by 2025. Utility decisions on retirements at Colstrip and Valmy plants followed later. And that's just in the Northwest. Other regions in the West have had similar conversations about their coal fleets.
However, the next decade is where we will see these plants quit producing electricity. And an increasing number of utilities are retiring coal because of competition from natural gas, solar, and wind generation. These retirements for economic reasons come with far less notice and are on top of retirements based on regulation, legislation, and court settlements. See chart and underlying Excel data.
Pressure on coal
Economic, regulatory, and environmental pressures have led to coal generation retirements. In aggregate, the Western coal fleet that can generate over 34,000 megawatts today is expected to be able to generate closer to 16,000 megawatts in 2030. Coal generation was around 17 percent of the dependable capacity Western utilities reported in 2016. In the future, it will be far less.
The pressure on coal can be seen not only in the plans for retiring coal plants, but also in the difficulties faced by the companies that mine coal. In 2006, TransAlta, the owner of the Centralia Coal Plant, closed the associated mine that was the last one in Washington. In 2019, three large mining companies have been in bankruptcy. Westmoreland Coal Co., the owner of the Rosebud mine that supplies Colstrip, emerged from bankruptcy in March. Cloud Peak, a company that mines coal in Montana and Wyoming filed for bankruptcy on May 10th. Blackjewel, a coal mining company in Wyoming, also declared bankruptcy. How long production will continue at the mines wrapped up in the Blackjewel bankruptcy is an open question.
Yet coal generation has supplied the power and services needed to run the electric grid. Retiring coal is a decision made utility-by-utility and state-by-state. But these decisions, in aggregate, will change the market for electricity. It will also reduce greenhouse gas emissions related to generating electricity.
How should the Northwest respond?
In the next decade, coal plant retirements will change the Western electric grid. This will impact the price and availability of electricity for Northwest utilities in electricity markets. A change of this magnitude also raises concerns about having enough generators to reliably operate the grid. How utilities decide to replace these resources will impact the cost and reliability of electricity, in the Northwest and more broadly in the West, for many years to come.
How should the Northwest respond to those changes? The 2021 Power Plan is an opportunity for the Council to study this question with help from our advisory committees. Join us at the next joint Generating Resource Advisory Committee and System Analysis Advisory Committee meeting. Or follow us on Twitter to get notifications of future advisory committee meetings.
Interactive map of Western coal production retirements
Circle sizes represent megawatts of operating capacity, hover for project details. Use the slider handles at right to see project retirements over the next 20 years. Click icon at top-right for full-screen.