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IEEFA Update: The Many Hurdles Facing the U.S. Coal-Fired Power Fleet

Why has U.S. coal production declined so enormously in recent years? Because the coal-fired power industry is producing less of the country’s electricity than ever. As recently as 10 years ago, coal-fired power plants provided half of U.S. power needs. Today that number is closer to 30 percent—and falling. Coal is not likely to fade entirely from the scene any time soon, but its share of the U.S. energy mix stands to drop to less than 20 percent in the not very distant future. This is largely a market phenomenon driven by cheap natural gas and by low-cost renewables, which, because they are so inexpensive, have become go-to fuels for power generation. Coal does not have a regulation problem, as the industry claims. Instead, it has a growing market problem, as other technologies are increasingly able to produce electricity at lower cost. And that trend is unlikely to end.

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Institute for Energy Economics
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