Phasing Out Coal from U.S. Electricity Increasingly a Regional Challenge

Electricity generation from coal in the United States fell 20 percent in 2020, bringing it to its lowest point since 1972. Even so, coal generated 19.3 percent of the country’s power, roughly the same as nuclear power (19.7 percent), and almost twice as much as the electricity generated by wind and solar. Coal is far from finished in the United States, even if its decline is steady and irreversible. But increasingly, phasing out coal is a regional issue: the challenge is no longer to reduce coal use in general, but to phase it out in places where it still reigns.

Coal-fired generation declined across the country over the past decade, but it still provides over half of the electricity in eight states: West Virginia, Wyoming, Missouri, Kentucky, Utah, North Dakota, Indiana, and Nebraska. These eight states accounted for just 11 percent of U.S. power generation in 2020, but 38 percent of its coal-fired generation. Combined, the generation from coal in these states was 293 terawatt hours (TWh) in 2020. By comparison, wind generated 337 TWh across the United States in 2020. What happens to coal in these states is a crucial element of what happens to coal in the United States as a whole.

Coal country is also generally a net electricity exporter. Around 57 percent of the electricity generated in Wyoming was sold across state lines in 2019; North Dakota and West Virginia exported 45 percent and 44 percent, respectively. Utah and Nebraska are also net exporters but on a smaller scale (around 13 to 14 percent). Three states—Missouri, Kentucky, and Indiana—are minor net electricity importers (less than 10 percent). Coal-heavy states are thus debited with emissions for electricity used elsewhere—while recipient states often claim to be reducing emissions when they are merely outsourcing them.

Coal has certainly lost ground even in coal country. In West Virginia, coal provided 88 percent of total generation in 2020, down from 97 percent in 2010. In Wyoming, coal went from 89 percent to 80 percent, and Missouri saw a similar shift. Elsewhere, the declines were sharper: Indiana’s system relied 90 percent on coal a decade ago; in 2020, just 53 percent. In Kentucky, coal reliance dropped from 93 percent to 69 percent. The direction of traffic is toward decarbonization, but the pace is uneven and, often, not rapid enough.

Natural gas has played an important role in reducing coal use in these states. In Indiana and Kentucky, there was almost a one-to-one switch between coal and gas by the end of 2020, although wind also made a dent in Indiana. In West Virginia, Missouri, and Utah, gas has provided around half of the fuel switching—the rest has come from wind in West Virginia and Missouri and solar in Utah. Elsewhere, gas has played a modest role—in Wyoming, North Dakota, and Nebraska, it was wind that pushed out coal rather than gas.

Despite these changes, the carbon intensity of electricity generation remains among the highest in the country, closely tracking a state’s reliance on coal. North Dakota has the fifth-highest penetration of wind in the country, but its carbon intensity is ranked 44th. Nebraska ranks seventh in wind but 43rd in carbon intensity. Wyoming has an above-average reliance on wind, at 16 percent, but the country’s worst carbon intensity (at 2,046 pounds per megawatt hour). Utah’s solar penetration is seventh in the country, but its carbon intensity is ranked 45th. A heavy reliance on coal acts to mute some of the benefits from deploying other low-carbon electricity sources, leading to more carbon-intensive mixes that states with less coal use.

What does this mean for the future of coal? For one, it is a reminder that country-wide trends can conceal variations in state-level performance. Coal-fired generation might be in decline across the United States, but not everywhere. A state system that relies on coal for over 50 percent of generation will require a significant transformation on the path to carbon neutrality. Gas has often played a major role in reducing coal consumption, but gas can only do so much for decarbonization. Each of these states is at the extreme end of the carbon intensity distribution for power generation, meaning that lots of change is needed.

There is a natural tendency for the public discourse to focus on states that are leading in the energy transition. But it is equally important to discuss places where the transition is happening too slowly. Coal country tends to fall in that latter category—coal is still big, and the carbon intensity of power generation too high. There are a number of ideas in Congress to channel more resources to those states—either for low-carbon energy manufacturing or for deployment. The White House has its own initiative for these energy communities. These proposals deserve serious attention. If anything, the experience of the past 10 years shows that coal country will need an extra push to wean itself off coal-fired power. The country’s decarbonization depends on it.

Nikos Tsafos is interim director and senior fellow with the Energy Security and Climate Change Program at the Center for Strategic and International Studies in Washington, D.C.

Commentary is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).

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Nikos Tsafos