Driven by tightening environmental regulations, competition from natural gas-fired power plants, and public pressure for cleaner sources of electricity, utilities will retire record numbers of aging coal power plants between 2013 and 2020. Coal plant owners face a complex series of decisions around these plants, including whether to convert them to natural gas combustion, how best to accomplish the decommissioning process, how to replace the generating capacity, and what the eventual disposition of the facility and the land will be.
At the same time, the coming wave of retirements offers large opportunities to the companies that will carry out the decommissioning processes: consultants; engineering, procurement, and construction (EPC) companies; demolition companies; environmental remediation firms; and so on. While retirements will occur in many countries, the majority will take place in North America and Western Europe, as countries in Asia Pacific, for example, continue on a path of major coal generation additions in the next 2 decades. Navigant Research forecasts that the market for coal plant decommissioning in North America and Europe will grow from $455 million in 2013 to $1.3 billion by 2016, declining rapidly thereafter. Cumulative revenue from 2013 to 2020 will total $5.3 billion.
“Utilities and other plant owners face a series of complex decisions in retiring aging coal plants,” says Richard Martin, editorial director with Navigant Research. “Developing a strategic plan, in consultation with a company that has experience in these major plant decommissioning projects, will be a critical element of the process of retiring these facilities and remediating the associated environmental issues.”
Actual demolition of the plant is not likely to be the most costly part of the decommissioning process, according to the report, and the value of the scrap metal from the plant on the open market will, in some cases, fully offset the cost of demolition. Environmental remediation will be the most expensive phase of many decommissioning projects. In particular, disposing of coal ash, typically stored in ponds onsite, will present a serious challenge in carrying out decommissioning projects.
The report, “Coal Plant Decommissioning”, examines the market for coal plant decommissioning, including forecasts for North America and Western Europe for both the number of plant retirements and the revenue from coal plant decommissioning through 2020.