Full Title: The U.S. Coal Sector: Recent and Continuing Challenges
Author(s): Howard Gruenspecht
Publisher(s): The Brookings Institute
Publication Date: January 6, 2020
Full Text: Download Resource
Description (excerpt):
The 40 percent decline in U.S. coal-fired power generation over the last decade accounted for 75 percent of the total reduction of 800 million metric tons in U.S. energy-related carbon dioxide (CO2) emissions between 2005 and 2017.[1] The shift away from coal was mainly driven by lower natural gas prices due to the shale revolution and stagnant U.S. electricity demand, and to a lesser extent by policy-supported growth in wind and solar generation. With power generation accounting for over 90 percent of U.S. coal use, there was a comparable reduction in U.S. coal production over the last decade.
Coal production and use in the United States has fluctuated over the past 100 years, with declines following peaks in 1920 and 1945 subsequently being reversed. However, current market and policy factors suggest that another significant recovery is not likely. Future prospects for the U.S. coal industry remain closely tied to its role in electricity generation, where forecasts suggest challenges to coal-fired plants, including competition from abundant and low-priced natural gas, additions of wind, solar, and gas-fired capacity, and stagnant electricity sales. New coal plants are much more expensive to build than either natural gas or renewable capacity, and also face the same dispatch competition as existing coal plants, making it highly unlikely that potential investors could ever recover their costs or earn a return on investment.