A report by Morgan Stanley published last month predicts that by 2033, coal-fired power plants will be replaced by renewable energy. The American multinational investment management and financial services firm helps mobilize capital to help corporations, governments, institutions and individuals around the globe achieve their financial goals.
The article states that renewable energy such as wind and solar power will provide almost 40% of electricity in America by 2030. This is expected to increase to 55% by 2035.
Last year, coal-fired plants supplied roughly 20% of electricity in the United States. The Energy Information Administration expects that this will rise to 22% this year, primarily as a result of higher natural gas prices.
In the long-term, the use of coal in power generation will begin to decrease, mainly because of lower natural gas prices and more strict environmental regulations. Morgan Stanley also showed that the share of electricity supplied by natural gas-fired power plants rose from 23% in 2010 to nearly 39% in 2022.
These recent projections from the investment management firm come as President Joseph Biden continues to take various executive actions to shift the country’s priorities to center on climate. Biden’s administration has set a goal to make America carbon neutral in 2050, which will require investments in renewables such as wind and solar as well as significant reductions in greenhouse gas emissions.
The latest closure for a coal-fired plant was announced on Feb. 2, 2023, when Alliant Energy closed its Columbia Energy Center in Columbia County.
BTU Analytics principal Andrew Bradford stated that putting an end to coal-fired generation by 2033 in the United States was aggressive, because closures would need to increase considerably from current levels to reach the new target. Bradford also noted that the United States had 236 GW of coal-fired generation capacity in its fleet, making up 267 plants. As of 2020, he added, 102 of the plants had formally announced retirement, which added up to 86.2 GW of capacity.
Major incentives and programs available in the nation, according to the Energy Information Administration, include renewable portfolio standards, government financial incentives for qualifying for renewable energy projects, feed-in tariffs and renewable energy certificates or credits (RECs). RECs allow purchasers to pay for renewable energy production without directly purchasing or producing the renewable energy.
It is expected that as the years roll by and coal energy is phased out, miners such as Warrior Met Coal Inc. (NYSE: HCC) will transition to other commodities.
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