PJM is dispatching coal-fired power less frequently
Coal

PJM is dispatching coal-fired power less frequently

Use of coal-fired power in the largest wholesale electricity market in the U.S. has dropped over the last decade, largely driven by the buildout of natural gas combined-cycle (NGCC) plants and higher relative fuel costs, according to the U.S. Energy Information Administration (EIA).

In 2023, the use of coal-fired generation in PJM fell to 34% of capacity. Yet coal generators were dispatched less frequently last year, contributing 14% of PJM’s generation, while making up 18% of its generating capacity.

By comparison, in 2013, the capacity factor of coal-fired power in the market was 56%, when coal made up 44% of the market’s generation and 38% of its capacity, EIA said.

PJM is the largest wholesale electricity market in the nation and includes all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and Washington, D.C.

Operating costs of resources are significant factors for PJM and other wholesale electricity markets to determine which plants will run. How much the plant is called on affects operator decisions to keep coal-fired plants open. Other factors influencing dispatch and retirement decisions include local demand, wholesale prices, fuel supply contracts, maintenance costs and debt service.

Competitive pressure from other energy sources, particularly natural gas, has significantly reduced generation from PJM’s coal fleet, increasing retirements. Since 2013, operators have retired about 34 gigawatts (GW) of coal capacity in PJM and switched about 2 GW of coal capacity to other energy sources, mostly natural gas.

Although PJM still has the most independent power producer (IPP) coal capacity in the U.S. (17.6 GW), IPP coal plants accounted for most of the retired coal capacity in PJM since 2013, about 24 GW. As a result, the generation from IPP coal in PJM has fallen more than the generation from regulated facilities, which unlike IPPs, operate with cost recovery that tends to lower financial risk.

In 2023, 11 coal-fired power plants generated over three-quarters of the region’s coal power, operating an average of 330 days a year with only three week-long shutdowns, EIA said. In contrast, the other 22 PJM coal plants operated 175 days on average, with nine shutdowns lasting about a month each.

Coal-fired units, designed for steady-state operation, face higher maintenance costs from frequent startups and shutdowns, influencing their operating strategies and competitiveness in the PJM day-ahead market. Consequently, coal plants might not be selected to operate when competing with other energy sources.

Coal remains PJM’s third-largest energy source, following natural gas and nuclear. However, competitive pressures from natural gas and renewables are leading to planned retirements of nearly 20% of PJM’s coal capacity by 2028. The remaining coal plants will likely continue to show varied run times.

All this is not to say older fossil-fired units within PJM could be retired as soon as possible.

In January PJM asked Talen Energy to delay the retirement of two units at the fossil-fired Herbert A. Wagner Generating Station in Maryland until transmission upgrades are in service.

PJM cited concerns about reliability impacts the retirement of Wagner Units 3 and 4 would cause.

In October, Talen Energy told PJM it planned to retire the 834 MW Wagner plant, which consists of three oil-fired units and a natural gas combustion turbine unit, as of June 1, 2025, citing environmental permitting and economic reasons.

But PJM is urging Talen to wait to retire Units 3 and 4 until the 2028 timeframe, when it said the transmission upgrades would be completed. According to the RTO, these upgrades were part of a solution identified to address reliability violations following the announced retirement of the adjacent 1,295 MW Brandon Shores facility, also owned by Talen and also requested to deactivate on June 1, 2025.

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