US electric-generating capacity retirements in 2024 to be lowest in 16 Years: EIA

New Delhi [India], February 21 : In a recent announcement by the US Energy Information Administration (EIA) on February 20, 2024, it was revealed that the anticipated electric-generating capacity retirements for the year are poised to hit a significant low, marking the lowest numbers in 16 years.
According to the EIA, the expected decrease in retirements for 2024 contrasts starkly with the previous year's figures, reflecting a 62 per cent drop in capacity retirements.
Operators are planning to retire a total of 5.2 gigawatts (GW) in 2024, a notable decline from the 13.5 GW retired in 2023.
Coal-fired and natural gas-fired generation collectively account for 91 per cent of the planned capacity retirements this year, with natural gas set to face the brunt of the closures.
Morris Greenberg, a senior manager with S&P Global Commodity Insights, noted that this decline in retirements was somewhat anticipated, as several independent system operators had been signaling a reduction in retirements for the year.
Greenberg, "Several independent system operators are seeing a significant drop in retirements this year. Some of this is just coincidence. However, some may reflect stronger demand forecasts and reliability concerns."
Greenberg suggested that this decrease could be attributed to stronger demand forecasts and concerns regarding reliability within the industry.
However, projections indicate a potential rebound in retirements for 2025, with over 15 GW expected to be retired, including 10 GW from coal.
This projection aligns with data from the EIA, although S&P Global forecasts slightly higher numbers for 2024 retirements compared to the EIA's data.
Natural gas closures are expected to dominate the retirement landscape in 2024, accounting for 46 per cent of the expected retirements.
Among the significant closures is the planned retirement of Constellation's Mystic Generating Station in Massachusetts, which has been operational since the 1940s.
This retirement, comprising 1,413.6 megawatts, represents a substantial portion of the gas capacity set to retire this year.
Additionally, coal capacity closures are anticipated to slow down in 2024, with 2.3 GW of coal-fired capacity scheduled for retirement, accounting for 1.3 per cent of the US coal fleet in operation at the end of 2023.
The closures are primarily targeted at older units, with the Seminole Electric Cooperative Unit 1 in Florida and the Homer City Generating Station Unit 1 in Pennsylvania among the largest coal retirements for the year.
Furthermore, petroleum closures are also on the horizon, with nearly all of the more than 450 MW of US petroleum-fired capacity scheduled for retirement originating from the Tennessee Valley Authority's Allen power plant.
Petroleum closures represent 9 per cent of all planned retirements for 2024.
"The plant is shutting down its combustion turbine site consisting of 20 old combustion turbine units totaling 427 MW. These units supplied power during times of peak demand across the TVA power system", the EIA said.
Looking ahead, the EIA predicts an increase in both gas and coal retirements for 2025, signaling potential shifts in the energy landscape as the industry continues to adapt to changing market dynamics and regulatory pressures.