OREANDA-NEWS. A PJM Interconnection analysis sees a maximum decline of 42pc for coal-fired generation in the largest US power grid in 2029 from baseline projections if the Environmental Protection Agency's Clean Power Plan for cutting CO2 emissions goes into effect.

But many scenarios analyzed by PJM staff with input from regulators in the 13 states making up the regional transmission organization show smaller declines for electricity generated by coal-fired power plants. Some scenarios even show an increase in coal burn despite retiring coal capacity, if natural gas prices rise and renewable capacity comes on line in amounts requiring significant backup resources. Baseline projections extrapolate from the 2014 regional transmission planning assumptions.

The maximum amount of coal and natural gas generation capacity projected to retire by 2029 is 42.8GW, in a scenario involving a full reliance on energy efficiency measures and large-scale retirements of nuclear units. The scenario involving the maximum decline of coal-fired generation from baseline levels would result in retirement of 30GW of fossil fuel generation.

PJM applied a metric called the net cost of new entry, which determines the capacity revenue a new power plant needs each year to remain economic after factoring in energy and ancillary services revenue. If an existing plant needs at least half of that revenue metric to stay in business, the grid operator says that resource is at risk of retiring. The metric is sensitive to the choice of a combustion turbine or combined cycle design for a new plant.

Not all states are equally affected. The PJM analysis does not disclose retirements by state. But the grid operator's calculation shows West Virginia's coal output is less volatile under the almost two dozen scenarios analyzed, compared with Ohio and Pennsylvania. The three states account for the bulk of coal-fired generation in PJM. Output from Pennsylvania's coal plants are more sensitive to scenario assumptions.

PJM analysis expects coal generation in 2020 to fall at most by 11pc from the base case. Coal under that worst-case scenario will account for 36pc of generation, down from the projected base-case share of 40pc in that year. Some compliance scenarios surprisingly yield a higher amount of electricity generated from coal plants if the CO2 rule's interim targets are enforced, despite coal plant retirements.

Some analysts expect coal demand in PJM and other US power grids to fall by a higher proportion than declines in electricity derived from coal plants, because the oldest part of the fleet gives way to more efficient power plants.

The results are preliminary since the final version of the Clean Power Plan will be released later this summer. States making up PJM will have until 2016 to file individual implementation plans or negotiate regional compliance options.