The coal era is coming to a close, say many energy observers. This has been known for years as utilities have had a number of coal-fired power plants set to be retired in the second decade of this century. These facilities will largely be replaced by gasfired plants.

This switch is happening at a considerably faster pace than originally anticipated as gas prices have been increasingly competitive with coal prices along with more government regulations on both the federal and state level against coal.

The primary regulations making it difficult for coal-fired plants going forward are the Mercury and Air Toxics Standards (MATS) and the Cross-State Air Pollution Rule (CSAPR). Further, the Environmental Protection Agency released a draft rule in 2012 to limit CO2 emissions from new power plants to 1,000 pounds per megawatt (MW) hour.

According to The New York Times, should this rule go into effect it would close out the remaining “old fashioned coal-burning power generation [built before 1990].”

In addition to regulatory pressures, there are growing pressures from the public on utilities selecting gas over coal for power generation.

“There is mounting public pressure not just from environmentalists, but also in many cases investors and shareholders. All things being equal, and with natural gas prices at or below coal, utilities will increasingly seek to avoid the negative public reaction associated with burning coal,” Richard Martin, editorial director of Navigant Research, said during the company’s recent webinar on coal-to-gas plant conversions.

He noted that unless coal plants implement advanced-compression technology or carbon capture and sequestration, they are unlikely to be able to compete with gas plants. “Once a plant has been slated for closure, the owner of the facility has a complicated series of decisions to make about the eventual disposition of the plant.”

Although it is often cheaper to build a new gas plant rather than convert a coal plant, more coal plant owners are doing just that due to the complexities involved in demolition, which requires full environmental mediation, repurposing of the site and mothballing of the facility.

Another advantage to converting a coal plant to operate on gas is that it is already located on the transmission grid. There is no need to find a building site or build new lines to the grid as they are already in place.

While there are incentives to move from coal to gas, coal power generation still retains a large portion of the market. According to Rick Smead, director at Navigant Research, coal represents 300,000 MW, or 27% of total power generation in the U.S. In the past 23 years, gas, solar and wind projects have accounted for 86% of the power-generation additions.

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