Wednesday, July 12, 2017 8:30 AM / Fitch Ratings
Ratings believes the announcement by the Trump administration to withdraw from
the Paris climate agreement will not reverse the tide for the ongoing greening
of the U.S. power sector. Coal is struggling against competitively priced
natural gas and zero marginal cost renewable generation. More consumers are
demanding green power and states are charging ahead with their renewable policy
goals, with many aggressively expanding them.
on preliminary data, CO2 emissions from the power sector in the U.S. have
declined approximately 25% in 2016 as compared with 2005 levels. This has
largely been driven by coal to gas substitution, as tighter environmental
mandates and significant declines in the price of natural gas have led to a
spate of coal retirements.
62GW of coal-fired capacity has been retired since 2005. Supportive state
renewable policies and federal tax incentives have supported a robust growth in
zero emission wind and solar generation. Power demand has largely stagnated
over the last five years due to energy efficiency initiatives, further helping
to curb CO2 emissions from the U.S. power sector.
considers it unlikely the coal retirement trend will reverse, despite the
significant shift in policy direction under the new administration.
Approximately 20GW of coal-fired capacity is at risk of retirement over the