The Covid-19 pandemic has led utilities to rush and shift their focus to obtain electricity from the more cost-effective renewable sources, expanding energy storage and EV infrastructure. The generation from coal-based plants is predicted to decrease at an accelerated rate as several utilities in the US are planning to remove coal from their portfolios as renewables achieve grid parity.
GlobalData’s power database demonstrates that in the US, coal-based generation formed approximately 24% of the overall generation in 2019 with the onset of the Covid-19 pandemic. It is expected to shrink to 20%-23% this year, meaning renewables will see a better share of the generation blend. Utilities in Indiana, Virginia and California are expected to spice up their renewables portfolios and energy storage in the future, which is likely to provide a boost to energy efficiency while keeping carbon emissions low.
Aiming to shut down all of its coal-fired generating plants by 2035, Tucson Electric Power (TEP) of Arizona expects to achieve 70% of its generation from solar and wind. TEP is not alone to have come up with such an initiative. Arizona Public Service recently chalked out a plan to generate carbon-free energy by 2050. The Colorado Springs Utilities, along with its 2020 Electric Resource Plan, plans to shut down its Martin Drake Coal plant by 2023, 12 years before planned. PacifiCorp, a subsidiary of Berkshire Hathaway Energy, shared a detailed plan to add over 6GW of solar and approximately 3GW of energy storage by 2038. Xcel Energy planned to shut down its last two coal-based generating power plants by 2030 and is likely to reduce 80% carbon emissions by then.
Generation from wind and solar depends on seasonality and several environmental factors, affecting its reliability. Energy storage and natural gas will help make wind and solar more reliable and it is expected that, as renewables and energy storage become more affordable, these will enable more utilities to steer towards greener pastures and reduce their emission liability cost-effectively.