News & Reviews News Wire Looming power-plant retirements to put coal traffic back into decline over next five years

Looming power-plant retirements to put coal traffic back into decline over next five years

By Bill Stephens | September 26, 2022

Wolfe Research analysis projects record decline in coal-fired power generation

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Yellow locomotives wtih coal hoppers
A Union Pacific coal train grinds its way up Logan Hill in the Powder River Basin of Wyoming in October 2020. (Bill Stephens)

NEW YORK – Coal is enjoying a day in the sun amid low stockpiles at power plants and high natural gas prices.

Overall railroad coal volumes have improved since the second quarter of 2021 and the trend is expected to continue into next year.

But then a wave of coal-fired power plant retirements will put coal volumes back into their long-term downward trend, according to an analysis by Wolfe Research. “Headwinds from coal plant retirements will accelerate in 2025 and into the latter part of the decade, although near-term fundamentals for coal remain positive,” analyst Scott Group wrote in a note to clients last week.

Some 23% of current coal-fired electricity generation capacity is expected to be retired over the next five years, according to Wolfe’s review of 70 power-plant retirement dates that utilities have already announced. The 48-gigawatt reduction in coal-fired electricity generation will be offset by a record 128-gigawatt expansion of natural gas, solar, and wind power over the next five years, Wolfe says.

The result will be a 12.1% decline in Class I railroad coal volumes through 2026, Wolfe projects.

Wolfe took the power plant shutdown data and married it with the sources of their coal and what railroad or railroads deliver the coal. Nearly three quarters of the plants scheduled to shut down in the next five years burn coal from the Powder River Basin of Wyoming and Montana, with retirements concentrated in the Midwest and Mid-Atlantic.

Based on this data, over the next five years Union Pacific stands to lose the highest percentage of its coal volume (16%), followed by BNSF Railway (14.5%), CSX Transportation (11.8%), Canadian Pacific (10.5%), Norfolk Southern (5.5%), and Canadian National (1.1%).

Coal generates about 11% of railroad revenue today, Wolfe says, down from 23% in the peak year of 2011.

13 thoughts on “Looming power-plant retirements to put coal traffic back into decline over next five years

  1. Amazing a UP coal train in the picture. The Omaha paper had an article that the Fremont NE power plant can’t get reliable coal train deliveries from the UP and they are less than fifty miles from UP headquarters at Omaha. Basically that is barely more that a one state movement of product.

  2. The enviros who want a 100% electric world will be the first to whine and moan and b***h when new power lines go up in their neighborhood.

    Just like the people who complain about cell towers all have cell phones as do all their kids.

  3. With potentially higher (and maybe much higher) natural gas and oil prices plus the poor reliability of wind and solar power, coal could be with us for a long time. People won’t be happy paying more for ‘green’ electricity with little reliability. Germany is burning as much coal as before. The only real substitute would be nuclear power.

    1. Germany mixes their boiler coal with wood pellets from Georgia (US) to reduce their emissions. Lowers CO2 but raises NOX to some degree.

      We will still need metallurgical coal and so does the Far East.

      The future is really in ASMR’s (Advanced Small Nuclear Reactors) that are designed to be modular and fail safe. They produce about 300mW each and can be bundled together to increase the aggregate output.

      One of the issues is long term uranium supply. One of our prior US Secretary of State authorized the sale of Uranium One and their reserves to a company run by a Putin associate.

    2. Proof that America is run by Democrat sub-idiots is the war against fossil fuel. All my life we have been told that electric heating and other electric appliances are inefficient compared to natural gas. Which has been my experience as a homeowner. The evil sub-idiots in the Dem party mandate all electric everything at the same time they are dismantling the electric power supply.

      John Rice is correct. If we are to increase demand for electricity the ONLY, and I repeat the ONLY, power source for electric generation is nukes.

    3. Let’s try to keep the political mess at bay on this site please…politics will always be a sore spot. Railroads are going to run no matter who, or what party is playing God. Coal will be here to stay in one capacity or another. Sometimes things that look good on paper have to be given a chance to either prove or disprove the theory behind them. Meanwhile, while they still try to sort it all out, I’m still buying gas powered cars, and keeping windmills off my farm.

    4. Boy you guys sure do have a lot of kids on your lawns!

      Oh look! There’s another one! He’s on your lawn Charles!

      You’re just a bunch of dinosaurs. We’re literally choking on greenhouse gases and you scream “more coal.” We’re all old. We’re leaving our kids and grandkids a mess they’re going to pay for.

    5. Charles, that was then, this is now and those appliances such as for central heating and water heating are now much more efficient when electric than natural gas…you can build entire buildings without needing to use one drop of natural gas. As for coal, I’m sure there’s a point where capturing the exhaust and then splitting the noxious fumes into their useful components at a breakeven point is possible, with gigawatts of power left over for the grid…the grid is what really needs to be beefed up though.

    6. No one is choking on greenhouse gasses and no one will. Electricity is most efficiently generated from nuclear and coal.

    7. No. The SoS that approved it was Hillary Rodham Clinton.

      For the grid to function properly, it needs a set of power plants that can provide what is called “base load”. Boilers powered by coal or LNG can provide base load. Nukes can provide base load.

      Examples of power sources that can’t are solar, wind, and 100 people working out at LA Fitness on their stationary bikes.

  4. Coal will never completely go away unless you like being hot/cold depending on the season and living in the dark. It will upset the envirokooks but they like living in the dark anyway.

  5. Coal remains dead man walking.

    RRs future is being primarily an Intermodal railroad that also happens to move botique carload and bulk/unit train traffic. Need to invest in that now!

    It’s that or continue the going out of business sale.

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