The writing was already on the wall for the U.S. coal industry when the Biden administration launched plans last year to slash greenhouse gas emissions from fossil fuel power plants.
The rising cost of operations, the allure of renewable energy incentives and the push to meet climate goals have made the nation’s workhorse coal plants uneconomical to run.
But a review of the future plans for the dirtiest coal plants in the U.S. shows just how much EPA could hasten the demise of the coal industry with the emissions rule that was finalized last month.
Of the nation’s 15 power plants that emit the most carbon dioxide, according to 2022 data from EPA, all but one is going to have to retire early or shell out for expensive new equipment to comply with the agency’s new greenhouse gas emission limit. Only one other power plant has started the process of evaluating carbon capture technology that would allow it to stay open past 2039.
“The coal industry is already in a moment of structural decline,” said Brendan Pierpont, director of electricity modeling for the think tank Energy Innovation. “What the EPA is doing here is really bringing the laggards of the industry up to the decision-making point that the rest of the industry is already facing.”
The final rule announced last month will require all coal plants not retiring by 2039 to install emissions-reducing technology. Plants scheduled to retire between 2032 and 2039 will have to partially convert to run on cleaner-burning gas by the start of 2030. Those scheduled to run beyond 2039 will have to install carbon capture systems to draw in at least 90 percent of their emissions, with the technology installed by the start of 2032.
Several legal challenges have already been launched to suspend or revise the rule — and it is likely that the regulation could be weakened or reversed entirely if former President Donald Trump defeats President Joe Biden in November. That leaves the future effects of the rule on the coal sector still uncertain.
According to an EPA analysis released with the rule, of the 114 coal plants with units that will be subject to the emissions limits, only 23 have announced plans to retire between 2033 and 2040.
While the rule makes certain exceptions for new gas plants that don’t run frequently, no such carve-outs exist for coal. And that could force the nation’s largest coal plants to either close early or make costly upgrades.
Take the Labadie power station, the largest coal plant in Missouri and the nation’s second-largest emitter in 2022, according to EPA. The plant’s four units opened between 1970 and 1973 and are all scheduled to retire by the end of 2042 — well outside EPA’s timeline.
Craig Giesmann, director of environmental services for Ameren Missouri, which operates Labadie, said in an email that the company is still reviewing the new regulations and analyzing compliance methods “to meet regulatory standards in a cost-effective way without compromising on grid reliability now or in the future.”
“The EPA released a significant amount of information,” Giesmann said. “We will take the necessary time to study it before determining any potential compliance requirements or schedules.”
It’s a common refrain for plant owners. Michelle Bloodworth, president of the coal industry trade group America’s Power, said that her group’s members are “being forced to make huge decisions in a short period of time” — especially regarding carbon capture technology that has yet to be proved to work at scale.
“I think there’s going to be a lot of pressure to retire early,” Bloodworth said in an interview.
Pending any delays from legal challenges, states will have until June 2026 to submit implementation plans detailing how coal plants will comply with the emissions limits.
EPA has said it does not expect reliability problems as the rules come into effect.
EPA spokesperson Shayla Powell said in an email that the agency determined that carbon capture is “cost reasonable for coal-fired steam generating units operating in the long term,” especially with federal incentives and tax credits to spur the industry along. Additionally, Powell said, the rule has flexibility for certain plants that may struggle to meet the standard.
She said states will “have the latitude to work with their sources to design a state plan consistent with the EPA emission guidelines.”
An analysis of the emission rule, as well as other coal plant regulations released at the same time, show that “the sector can meet growing demand for electricity and provide reliable, affordable electricity at the same time as it reduces pollution to protect health and the planet,” Powell said.
The emissions rule has the highest profile in a suite of rules the Biden administration has announced, a portfolio that also includes limits on toxic emissions, water pollution and coal waste. The combination of those limits was designed to offer the industry regulatory certainty about the prohibitions all plants would face.
Holly Bender, chief energy officer for the Sierra Club, also said the “whole-sector approach” to reducing coal pollution shows where the coal industry is going.
“It’s a big deal to be able to look across the landscape and have the picture of the future come into view," Bender said. "A picture where every single remaining coal plant can no longer operate in a business-as-usual environment."
Evolving power system
EPA’s own modeling shows that the administration expects its greenhouse gas rule — which also limits emissions on new gas-fired power plants — to make a sweeping change to the coal system.
Of the existing 181,000 megawatts of coal-fired capacity in 2023, EPA said, the final rule will spur 104,000 MW to retire by 2035. That’s 21,000 MW more than what would be expected without the rule.
EPA also doesn’t expect power plant operators to wait. According to its modeling, an additional 5,000 MW of coal capacity will retire by 2030 as operators look to comply with the final rule.
Of the remaining coal capacity, EPA said, 19,000 MW worth would have to install CCS, up 8,000 MW from the baseline.
By 2045, only 1,000 MW of coal paired with carbon capture would remain online.
That’s a step up from an already steep level of plant closures. According to the U.S. Energy Information Administration, 22,300 MW of coal-fired capacity retired in 2022 and 2023 combined, with another 2,300 MW expected to retire in 2024. In 2025, retirements are forecast rise to nearly 11,000 MW.
Many of the planned retirements are the result of age coinciding with policy. On average, coal plants retire around their 50th year and the capacity-weighted average age of the nation’s coal fleet in 2021 was 43 years, according to EPA. At the same time, 23 states have goals to achieve 100 percent clean electricity in the coming decades and several large companies have sworn off buying fossil fuels.
Energy Innovation’s Pierpont said that at least 25 utilities have also announced plans to get rid of their coal assets by 2035.
But the nation’s 15 highest-emitters aren’t in that group, even as most of them approach the expected retirement age. Only DTE Energy’s Monroe power plant in Michigan will retire by 2032 — and two of the plant’s four units will retire in 2028.
In an email, EPA’s Powell said announced retirement schedules were not a factor in the rule’s design. Instead, she said, it was “primarily informed by timing considerations for the state plan process and control installation timing considerations.”
Two plants on the list are relatively young, making decisions on how to adapt even more difficult.
Vistra's Oak Grove plant in Texas, for example, is only 13 years old. The company did not respond to a request for comment on its plans, but CEO Jim Burke said on an earnings call this month that the company is still evaluating whether it will have enough gas supply to co-fire the coal units with gas.
Likewise, the Prairie State Generating Station in Illinois is just 11 years old, one of the newest coal plants in the country. Illinois law already requires the plant to close by 2045 and reduce emissions 45 percent by 2038.
"As we anticipated, this rule will have an unprecedented impact on Prairie State and the rest of the nation’s coal fleet,” said Alyssa Harre, vice president of external affairs and organizational strategy for the Prairie State Generating Co., in an email. The company, she said, “continues to review the details” of the final rule.
Bloodworth with America’s Power’s said utilities could struggle to meet growing demand that if most of the large coal plants do decide to close, especially at times when the sun is not shining or the wind is not blowing.
“This is going to create a tremendous amount of uncertainty at a time when demand is growing,” Bloodworth said. “A state might have to turn away an opportunity for economic development if the power is not there. It’s going to exacerbate the reliability problems we already have.”
Bender of the Sierra Club, however, said the onus will now be on regulators and utilities to find cleaner sources of energy to fill the gap. The nation, she said, faces a “transformational moment” to overhaul the power system with sources that generate less pollution and present fewer health risks.
“We can’t stay stuck where we are any more, we are moving forward to reduce climate, air and water pollution,” Bender said. “As the coal fleet comes to the end of its useful life, the question is what comes next. And we’re committed to ensuring that what comes next is clean energy.”
Correction: The list of the highest-emitting coal plants previously misstated two plant locations.
