The Reliability and Resilience of the U.S. Existing Coal Fleet

By Janet Gellici
Executive Vice President and Chief Operating Officer, National Coal Council

In May 2014, the members of the National Coal Council (NCC) completed a study for the U.S. Secretary of Energy that assessed the value of the nation’s existing coal generation fleet and identified measures to improve its reliability and efficiency while reducing emissions. This fleet of existing power plants underpins economic prosperity in the U.S., providing direct socioeconomic benefits, energy and price stability, environmental progress through continuous technology advancements, and job creation opportunities. Too often the merits of investing in our current assets as well as the opportunities that abound to further enhance the value of those assets are overlooked. In fact, there exists a wide array of options where investment in this fleet is worth considering.

National Coal Council Study Mission

The NCC is a federally chartered advisory group to the U.S. Secretary of Energy, providing advice and recommendations to the Secretary on general policy matters relating to coal and the coal industry. During its 30-year history, the Council has prepared more than 30 reports for the Secretary on topics ranging from carbon management to coal exports to utility deregulation.

In January 2014, Energy Secretary Ernest Moniz requested that NCC undertake a study detailing what both industry and the U.S. Department of Energy (DOE) could do to facilitate enhancing the capacity, efficiency, and emissions profiles of the existing coal generation fleet in the U.S. through application of new and advanced technology. This article provides an overview of the key findings and recommendations from the study: “Reliable & Resilient: The Value of Our Existing Coal Fleet”.1

Today’s U.S. Coal fleet

Since 1950, coal has been the workhorse and leading source of power generation in the U.S., providing upward of 50% of total U.S. generation.2 This dominance has resulted from coal’s domestic abundance, accessibility, reliability, and low cost compared with other generation alternatives. In 2013, coal continued to lead U.S. generation, producing 39% of electricity nationwide with approximately 310 GW of generating capacity.

Low-cost coal has helped keep U.S. electricity prices below those of other free market nations. For example, in 2013 the average price of residential and industrial electricity in the U.S. was one half to one third the price of electricity in Germany, Denmark, Italy, Spain, the UK, and France.3,4 If the existing coal fleet were replaced with the next cheapest alternative generating source—natural gas combined-cycle power plants—a conservative estimate of the impact on the U.S. economy would be a 1.5% drop in Gross Domestic Product (GDP) and a loss of two million jobs by the year 2040 (see Figure 1).1

Figure 1. Value of existing coal fleet: electricity cost savings  Notes: Annual Value = Average Coal Generation for 2008-12 × (Cost of new NGCC generation/MWh - Cost of existing coal generation/MWh); Total U.S. electricity sales in 2011 = $371 billion. Source:  Technology cost, projected fuel cost, and electricity generation data were taken from DOE/EIA 2013 Annual Energy Outlook5

Figure 1. Value of existing coal fleet: electricity cost savings
Notes: Annual Value = Average Coal Generation for 2008-12 × (Cost of new NGCC generation/MWh – Cost of existing coal generation/MWh); Total U.S. electricity sales in 2011 = $371 billion. Source: Technology cost, projected fuel cost, and electricity generation data were taken from DOE/EIA 2013 Annual Energy Outlook5

Continuous technology improvements have greatly reduced emissions from the coal fleet and done so during a period in which coal generation has increased substantially. Since 1970, coal-based power generation has increased nearly 150% as key emissions have decreased almost 90%. State-of-the-art technologies have reduced emissions of SO2 by 88%, NOx by 82%, and particulates by 96%.6

The average U.S. coal-fired power plant has operated for 39 years.A Although the age of a generating unit is not a dispositive criterion in decisions related to its continued operation, age is one of several important considerations influencing decisions regarding capital investments or the prospective of unit retirement to meet future economic and environmental compliance requirements.

The U.S. Energy Precipice

The U.S. benefits from having a diverse portfolio of electricity sources. Despite this, the U.S. Energy Information Administration (EIA) projects very little new coal capacity will be built in the U.S. through 2040.7 Therefore, maintaining coal’s role in this diversified portfolio will likely rest on industry’s ability to continue safe and economical operation of the existing fleet, while making the changes necessary to ensure continued environmental compliance.

Reduced demand for electricity provides an additional incentive for continuing to maintain the existing U.S. coal fleet. The nation’s electricity demand grew at 6–11% per year during the 1950s and 1960s, at 2.5% or less since 1995, and was actually negative in 2009, 2011, and 2012. EIA projects that generation will grow less than 1% per year between 2012 and 2040.7 This relatively low rate of growth in electric power demand emphasizes the importance of advancing policies and technologies that preserve the existing fleet’s benefits and portfolio value.

Preservation of the existing coal fleet in the U.S. is being challenged by both marketplace and policy factors. The EIA reports that 10 GW of coal-based capacity was retired in 2012 and projects another 50 GW to retire by 2020, based on a combination of market forces and regulations which have been adopted through 2013.8 While these projections take into account the impact of regulations such as the Mercury and Air Toxics Standards (MATS), they do not include the effect of pending water regulations (including Clean Water Act 316(b) and effluent guidelines regulations), solid waste regulations (such as those related to Coal Combustion Residuals), or CO2 regulations (including recently proposed New Source Performance Standards 111(b) and existing source regulations 111(d)). In fact, the U.S. Environmental Protection Agency (EPA) projects that coal capacity will decrease to 195 GW in 2020 due to 111(d) regulations.9

Competitively advantageous natural gas prices have recently caused a decrease in demand for coal-fired generation, although coal’s share of generation recovered somewhat in 2013, primarily in response to increased spot prices for natural gas.10 EIA’s most recent projections for the price of delivered gas to electric utilities indicate an expected real (constant dollar) increase of 3.1% per year (2012–2040) versus a 1.0% per year increase for coal.11

The risk associated with the projected level of coal plant retirements was made evident during the severe cold weather events of the winter of 2013–2014. During this period, many regions of the U.S. approached a dangerous energy precipice in which both reliability and affordability of supply were impacted. During increased power demand for much of the U.S. in January 2014, for example, alternative fuels were significantly supply constrained. Wind produced only 4.7% of the nation’s power while solar produced less than 0.2%. Nuclear provided only 5% of incremental year-over-year generation and hydroelectric output declined 13%. Power generation from natural gas decreased when the resource was diverted to fuel residential heating needs and gas prices soared to over three times that of coal (Btu basis).12

As shown in Figure 2, coal-fired generation provided 92% of the increase in electric power in the U.S. for the first two months of 2014 compared to the same months in 2013.13 The major lesson learned from the polar vortex experiences in January and February 2014 was that the U.S. power grid is less resilient than previously believed. Only the availability and operation of coal units scheduled for retirement over the next two years enabled the power sector to meet demand during periods of harsh weather events.

Figure 2. Portion of increase in U.S. electricity generation, by fuel Jan-Feb 2014 versus Jan-Feb 201313

Figure 2. Portion of increase in U.S. electricity generation, by fuel Jan-Feb 2014 versus Jan-Feb 201313

Shoring up the Base

Ensuring the continued, cost-effective operation of the U.S. existing coal fleet while also assuring compliance with national environmental objectives will require devoting resources to enhance plant efficiency. Decisions to commit resources to energy efficiency measures generally consider a range of factors. These include the positive impacts associated with reducing fuel consumption, lowering operating costs, enhancing operational flexibility, and reducing emissions of conventional pollutants and CO2, as well as the potentially negative impacts related to New Source Review (NSR; see below).

Thermal efficiency improvements generally require an investment in process equipment and/or in operation and maintenance (O&M). Although the economic incentive to improve efficiency has practical limits, the increasing focus on controlling CO2 emissions will likely provide a greater impetus to do so. The efficacy and payoff of any given efficiency-improving measure at a power plant is site-specific. The initial design and condition of a plant, age, coal rank, environmental requirements, and maintenance practices determine the payoff that can be derived.

Improving the efficiency of existing power plants is critical to maintaining the value of the current fleet. Existing and emerging technologies offer opportunities to shore up today’s U.S. coal-fired generation base. Their deployment, however, may be hampered by regulatory requirements that impose significant and costly emission reduction requirements that could offset and, in some cases, completely negate efficiency gains by increasing parasitic power demand to operate pollution control equipment.

Regulatory Impediments to Efficiency Improvements

Under EPA’s New Source Review (NSR) program, major new sources and major modifications of existing sources must obtain pre-construction permits that include a requirement to apply state-of-the-art air pollution control technology. Some actions to improve efficiency at an existing power plant could lead to a designation of the change as a “major modification”, thus subjecting the unit to NSR permitting requirements. These requirements usually entail additional environmental expenditures (that can reduce efficiency), as well as delays associated with processing the permit.

NSR unintentionally limits investments in efficiency. On 12 June 2014, in a presentation at the Coal Utilization Research Council’s (CURC) Advanced Coal Technology Showcase in Washington, DC, Senator Heidi Heitkamp (North Dakota) remarked that it would be a “fiduciary transgression” for utilities to consider power plant efficiency improvements without anticipating it would trigger NSR.

EPA itself has confirmed a problem exists with its interpretation of NSR. In 2002, the agency noted: “As applied to existing power plants and refineries, EPA concludes that the NSR program has impeded or resulted in the cancellation of projects which would maintain and improve reliability, efficiency, and safety of existing energy capacity. Such discouragement results in lost capacity, as well as lost opportunities to improve energy efficiency and reduce air pollution.”14

In short, the fundamental barriers to improving power plant efficiency and reliability cited by EPA in 2002 remain in today’s NSR rules. The uncertainties created by the NSR rules, their enforcement by EPA, and the substantial, even prohibitive, cost of adhering to NSR create strong disincentives to the widespread deployment of the efficiency measures recommended in the NCC’s report. Unfortunately, the NSR shadow has also cast a pall on the research, development, and deployment (RD&D) that would more than marginally improve the efficiency of the existing coal fleet.

Cleaning House with Technology

The NCC report details numerous measures that could potentially be applied at coal-fired power plants to enhance efficiency.B Steam turbines could be refitted with modern and more efficient multistage rotors. Corrosion and deposition on major heat transfer components (e.g., boiler tubes and condensers) could be reduced, thus improving heat transfer efficiency. Improved sensors and controls could prospectively allow a plant to operate closer to conditions optimal for higher efficiency. It might be possible to use variable speed drives to make motors more efficient, particularly at lower load.

Although many of these technologies already exist and are operating on some units, there is not a one-size-fits-all package of solutions that can be readily applied to or accommodated by the existing coal fleet. In some cases, the opportunity to apply efficiency improvements will be negligible because the unit either is already operating in a highly efficient mode with some or all of the available improvements in place or because the implementation of potential improvements is not cost-effective and/or technically feasible. The degree of efficiency improvement possible at a given unit is highly site-specific and may depend on the design of the unit, current maintenance procedures, whether the unit operates as base load or cycling, the type of coal used by the unit, and the configuration of the unit. Even the location of the unit is relevant to efficiency because plant efficiency is sensitive to ambient temperature and atmospheric pressure (elevation).

For example, included among the many efficiency-enhancing opportunities addressed in the NCC study is coal drying and beneficiation. Lowering moisture from coal increases boiler efficiency and thus plant-generating thermal efficiency, if the moisture can be reduced using waste heat (see Figure 3).  Coal drying with waste heat is a commercially available option, but not one that every plant can effectively deploy. Notably, this technique has been employed by Great River Energy (GRE) in North Dakota using local lignite coals. GRE has reduced the moisture content of lignite from 39% to 29%, increasing plant net-generating thermal efficiency by 4% and lowering heat rate by about 1200 Btu/kWh.15 Less improvement would be expected for drying higher rank coals (bituminous and sub-bituminous) because they tend to be much lower in moisture content than lignite.

Figure 3. Coal moisture impact on efficiency (figure courtesy of E.ON)

Figure 3. Coal moisture impact on efficiency (figure courtesy of E.ON)

It’s also prospectively possible to achieve significant efficiency benefits by altering the composition of coal, beyond removing moisture. Coal beneficiation processes that employ chemical or mechanical treatments to reduce the inorganic content can contribute to controlling regulated hazardous pollutants. Other beneficiation technologies that add compounds to coal during processing hold promise for decreasing moisture and increasing heating value. For instance, PSEG is experimenting with an ammonium hydroxide-based beneficiation process that displaces both water and inorganic material—and has been able, in pilot tests, to decrease coal moisture from about 31% to 7% and increase heating value from 7859 Btu/lb
to 11,363 Btu/lb.16

Coal beneficiation technologies can also reduce boiler slagging and fouling, improve heat transfer in the boiler, and elevate efficiency. Additionally, lower sulfur fuel can reduce the auxiliary power demand for conventional flue gas desulfurization (FGD), increasing net unit power output.

Modest improvements in efficiency are possible at some units with existing technologies to improve heat transfer, reduce heat losses, and make better use of low-quality heat. More significant efficiency gains may be achievable following additional RD&D to advance the commercial viability of emerging technologies, including the enhancement of the conventional Rankine thermodynamic cycle by adding topping or bottoming cycles or by using different working fluids than water.

What to Do?

In fact, RD&D by industry and government, and through industry–government collaboration, is key to enhancing the efficiency, flexibility, reliability, and capacity of the existing coal fleet. Past challenges to coal generation, such as the need to reduce emissions of SO2, NOx, and mercury, were met through collaborative efforts between the public and private sectors to develop new technologies. The terms “flue gas desulfurization” (FGD), “selective catalytic reduction” (SCR), and “activated carbon injection” (ACI) were not part of the nation’s lexicon in 1970. Today, these systems, developed through such collaboration, are standard equipment on new coal-fired power plants and have been widely deployed on existing units as well.

In fact, for every $1 of federal funds invested in coal RD&D, $13 of benefits have accrued to the U.S. Moreover, RD&D in advanced coal technologies can produce products for sale abroad, enhancing U.S. manufacturing, improving the nation’s balance of trade, and enabling more efficient, cleaner operations of coal plants internationally. Continued and accelerated RD&D is vital in the areas of advanced materials, assessment tools, sensors and monitors, cycling impacts and operations, topping and bottoming cycles, and commercial demonstration of carbon capture and storage (CCS).

The existing U.S. coal fleet offers many benefits; benefits that are in jeopardy due to coal plant closures and the nation’s increasing overreliance on natural gas. The National Coal Council study on the value of the existing coal fleet recommends that DOE lead efforts to maintain coal’s cornerstone role in a diverse generation portfolio and that federal energy policy assessments, such as the ongoing Quadrennial Energy Review (QER), consider the value of that diversity and the impact of coal plant retirements. NCC recommends that DOE lead collaborative efforts with industry to assess the impacts of the 2014 polar vortex experience on price, availability, reliability, and potential consequences of similar future events. The Council encourages DOE to work with EPA to eliminate NSR barriers that disincentivize efficiency improvements to reduce emissions, increase capacity, and enhance plant operations.

In 1882, Thomas Edison’s Pearl Street Station in Manhattan launched a new energy age of coal-generated electric power. The coal-fired power plants in the U.S. have served our nation well ever since. With some additional care and attention, they’ll continue to offer many valuable benefits well into the future.


  1. Capacity-weighted age, as of 2014, excluding retirements in 2013–2014.
  2. The NCC report does not provide a quantitative assessment of the degree to which existing technologies could improve the heat rate (or efficiency) of the existing coal fleet.



  1. National Coal Council. (2014, May). Reliable & resilient: The value of our existing coal fleet,
  2. U.S. Energy Information Administration (EIA). (2012). Annual energy review 2011.
  3. EIA. (2014, February). Electric power monthly with data for December 2013,
  4. European Commission – Eurostat. (2014, May). Electricity and natural gas price statistics,
  5. EIA. (2013). Annual energy outlook 2013,
  6. Coal Utilization Research Council. (2012). CURC/EPRI roadmap,
  7. EIA. (2013, December). Annual energy outlook 2014 early release. Reference case,
  8. EIA. (2014, 14 February). AEO2014 projects more coal-fired power plant retirements by 2016 than have been scheduled,
  9. U.S. Environmental Protection Agency (EPA). (2014, June). Regulatory impact analysis for the proposed carbon pollution guidelines for existing power plants and emission standards for modified and reconstructed power plants,
  10. EIA. (2013, 22 July). US natural gas spot prices increased during first-half 2013,
  11. EIA. (2013, March). AEO retrospective review: Evaluation of 2012 and prior reference case projections.
  12. EIA. (2013, 15 March). Annual energy outlook retrospective review,
  13. EIA. (2014, April). Electric power monthly with data for February 2014,
  14. EPA. (2002, June). New Source Review: Report to the President,
  15. Great River Energy. (2013). DryFiningTM [fuel enhancement process],
  16. Lopriore, R., PSEG President – Fossil, Personal Communication, 14 February 2014.
  17. To access the NCC study “Reliable & Resilient: The Value of Our Existing Coal Fleet” visit


The author can be reached at


Key Findings and Recommendations from the National Coal Council Study


  • The U.S. existing coal fleet continues to play a vital role in meeting our nation’s electric power needs. The extreme cold weather events of the winter of 2013–2014 highlight the need to maintain a diverse portfolio of generation options in order to ensure the availability of affordable, reliable power for residential and industrial uses.
  • The historical deployment of advanced coal technologies demonstrates that coal generation can be increased while simultaneously reducing emissions.
  • Retrofitting advanced environmental technologies and enhancing efficiency at existing coal plants could result in the creation of 44,000 to 110,000 jobs, depending on the degree of efficiency improvement achieved.


  • DOE should lead collaborative efforts with industry to assess the impacts of the 2014 polar vortex experience on power prices, availability, and reliability.
  • DOE should ensure that basic federal energy policy assessments, such as the Quadrennial Energy Review and the President’s Advanced Manufacturing Initiatives consider the impact of lower priced electricity facilitated by coal-fired power plants, and include an assessment of the value of diversity of generation sources and how pending coal plant retirements are likely to impact power prices, availability, and reliability.

Download the full study with all key findings and recommendations at

The content in Cornerstone does not necessarily reflect the views of the World Coal Association or its members.

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