Coal-Fired Power Plant Retirements in the U.S

Rebecca J. Davis, J. Scott Holladay and Charles Sims

No 28949, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We summarize the history of U.S. coal-fired plant retirements over the last decade, describe planned future retirements, and forecast the remaining operating life for every operating coal-fired generator. We summarize the technology and location trends that are correlated with the observed retirements. We then describe a theoretical model of the retirement decision coal generator owners face. We use retirements from the last decade to quantify the relationships in the model for retired generators. Our model predicts that three-quarters of coal generation capacity will retire in the next twenty years, with most of that retirement concentrated in the next five years. Policy has limited ability to affect retirement times. A $20 per MWh electricity subsidy extends the average life of a generator by six years. A $51 per ton carbon tax brings forward retirement dates by about two years. In all scenarios, a handful of electricity generators remain on the grid beyond our forecast horizon.

JEL-codes: H40 L10 L50 L94 Q4 (search for similar items in EconPapers)
Date: 2021-06
New Economics Papers: this item is included in nep-age, nep-ene, nep-env and nep-reg
Note: EEE
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