EIA projects generation from coal and nuclear power plants will plateau after 2025

Despite projected growth in natural gas and renewable energy use to generate electricity through 2050, in the Annual Energy Outlook 2020 (AEO2020) Reference case, the U.S. Energy Information Administration (EIA) projects that coal and nuclear power plants will collectively provide more than 25% of generation through 2050. Other scenarios with different assumptions for oil and natural gas supply—which in turn affect natural gas prices—have implications for long-term coal-fired and nuclear-powered electricity generation in the United States.

In the AEO2020 Reference case, the share of electricity generated from coal decreases from 24% in 2019 to 13% in 2050, and the share of electricity generated from nuclear power is projected to fall from 20% in 2019 to 12% in 2050. In the High Oil and Gas Supply case, increased supply of natural gas results in lower natural gas prices. In this scenario, natural gas-fired electricity generation continues to increase, largely at the expense of coal and nuclear, which fall to 9% and 7% of total electricity generation in 2050, respectively. Similarly, in the Low Oil and Gas supply case, higher natural gas prices result in coal’s share falling to 16% and nuclear’s share falling to 14% in 2050.

Recent trends for electricity generated from coal and nuclear are the result of historically low natural gas prices, limited growth in electricity demand, state-level clean energy initiatives, and increasing competition from renewable energy. Several coal-fired power plants, totaling 33 gigawatts (GW) of capacity, have already announced their intention to retire, according to EIA’s survey of power plant operators and the companies’ retirement announcements.
The Reference case projects another 69 GW of coal-fired capacity to retire, mostly by 2025. If realized, the amount of coal-fired capacity retired annually from 2023 through 2025 would exceed the 15 GW of coal-fired capacity retired in 2015, which was the largest amount of coal-fired retirements in EIA’s retirements data, which date back to 2002.
After 2025, EIA projects that only the most efficient coal-fired plants will remain operating through 2050 as natural gas prices rise and coal power plants remain competitive. EIA assumes that less efficient coal-fired plants will retire by 2025 to comply with the Affordable Clean Energy (ACE) rule. This rule, finalized by the U.S. Environmental Protection Agency (EPA) in June 2019 as a replacement for the Clean Power Plan, directs states to develop plans for improving the heat rates (i.e., thermal efficiencies) of their coal-fired power plants to reduce carbon dioxide (CO2) emissions.

In the AEO2020 Reference case, total U.S. nuclear power generating capacity decreases from 98 GW in 2019 to 79 GW in 2050. Similar to EIA’s projections for coal retirements, most of the projected nuclear power retirements occur between 2020 and 2025. In the Reference case, nearly 24 GW of nuclear capacity retires: 7.5 GW have already been announced, and EIA’s Reference case projects another 16 GW will retire through 2050 in response to competitive market conditions.
Two new nuclear plants totaling 2.2 GW are projected to come online in the next two years (Georgia’s Vogtle Units 3 and 4), and the existing fleet adds another 2.1 GW of capacity through uprates, or improvements to existing plants.