Road to Decarbonization: U.S. Coal Plant Closures
As the push to decarbonize starts to kick into gear in the U.S., how do coal plant closures factor into the equation?
With a target of net-zero emissions by 2050, the U.S. is examining all aspects of its economy to see where action is needed. In the automotive industry, for example, the Biden administration is aiming for half of new vehicles to be electric by 2030, following in the footsteps of automakers that have made similar commitments.
But in the power sector that supplies electricity for much of the country, fossil fuels continue to be large emission sources. Coal, which accounted for just 19% of electricity generated in the U.S. in 2020, created 54% of the power sector’s emissions.
That’s leading to U.S. utilities feeling the pressure to retire coal plants and look for alternatives. This infographic from the National Public Utilities Council visualizes the coal plant closures that have been announced, and how much power will be affected as a result.
Where Are U.S. Coal Plant Closures Happening?
Accurately tracking coal plant closures currently means turning to non-profits and parsing through company reports. To assemble this list, we leveraged the Global Energy Monitor and Carbon Brief and cross-referenced against company sustainability reports and news releases.
The result? 80 coal plants with a total capacity of 98.3 GW publicly scheduled for full retirement over the next three decades.
|Plant||State||Retirement Date||Capacity (MW)|
|Fayette* (announced not confirmed)||TX||2022||1,690|
|South Oak Creek||WI||2024||1,240|
|AES Puerto Rico||PR||2027||510|
|Victor J. Daniel||MS||2027||1,097|
|Allen S. King||MN||2028||598|
|J. H. Campbell||MI||2040||1,540|
|James E. Rogers||NC||2049||1,481|
Noticeably, most of the coal plant closures are targeted in the Midwest (which uses the most coal for power). And most of the retirements are coming early, with the 2020s seeing more than half of announced closures and retired capacity (53.6 GW).
But the largest coal plants with announced retirement dates are currently scheduled for the 2030s and 2040s. That includes Duke Energy’s Gibson power plant in Indiana, the fifth largest coal plant in the U.S. and the largest with a retirement date.
What’s Next for U.S. Decarbonization?
Though it seems like the U.S. has a lot of coal plant closures announced, there’s a lot left to go.
The 98.3 GW of tracked coal plant closures is just 45% of U.S. coal electricity production in 2020. Though many utilities have talked about eventually assessing and planning retirements for some of the remaining 55%, no concrete plans have been announced yet.
“In our industry, deciding to exit coal-fired power is not taken lightly,” said Omaya Ahmad, Sustainability Policy Consultant at Arizona Public Service. “Our coal plants are often the oldest in our fleet and are largely the reason our service territories have grown and flourished into what they are today. However, the pressures presented by climate change and the economic demands tied to coal have required a commitment to transition to clean energy.”
Coal Plant Closures Are Part of a Larger Equation
But as Ahmad explains, turning off coal plants is not such a quick-and-easy fix.
“Such a transition will be a lofty undertaking and will not come without its own challenges,” said Ahmad. “Recognizing the regional transition landscape and timeline depicted on a map like this one will help utilities adequately prepare for and support their coal communities as we all take steps to reach a clean energy economy.”
And coal plants are just one part of the decarbonization equation. Some utilities are opting to transform coal power plants into natural gas plants, which are more cost-efficient and emit less than coal. Even though many utilities and consumers are turning away from carbon emitting fuel sources entirely, there are more than 200 new natural gas plants planned in the U.S.
But the big question is how the generated electricity from coal will be replaced. Communities that rely on coal for power (and economic strength) will have to turn to natural gas or work on renewables capacity, while others have already started the transition.
National Public Utilities Council is the go-to resource for all things decarbonization in the utilities industry. Learn more.
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Visualizing Raw Material Inflation in Canada
Over the last year, raw material inflation in Canada was 37%. Which material prices jumped the most, and how does this impact manufacturers?
Raw Material Inflation in Canada
Inflation in Canada is climbing, and it has impacted the raw materials manufacturers use to produce goods. In fact, raw material prices have climbed 37% year-over-year on average.
More than half of manufacturers say this is one of their top challenges. In this graphic from Canadian Manufacturers & Exporters (CME), we show which materials have seen the biggest price spikes over the last year.
Inflation by Raw Material
The table below shows the rate of inflation in Canada for select raw materials from May 2021 to May 2022.
|Raw Material||Category||Price Change
(May 2021-May 2022)
|Crude Oil & Bitumen||Crude Energy||85.0%|
|Natural Gas||Crude Energy||50.3%|
|Beans, Peas, & Lentils||Crops||43.3%|
|Logs & Forestry Products||Forestry Products & Natural Rubber||42.1%|
|Scrap Metal||Metal Ores & Scrap||40.3%|
|Fish & Fishery Products||Animal Products||23.7%|
|Lead & Zinc Ores||Metal Ores & Scrap||21.2%|
|Cattle & Calves||Animal Products||10.2%|
|Eggs in Shell||Animal Products||8.4%|
|Sand, Gravel, & Clay||Non-metallic Minerals||8.1%|
|Fresh Fruit & Nuts||Crops||8.0%|
|Nickel Ores||Metal Ores & Scrap||5.8%|
|Tin, Iron Alloys, & Other Ores||Metal Ores & Scrap||3.3%|
|Gold Ores||Metal Ores & Scrap||2.1%|
|Natural Rubber||Forestry Products & Natural Rubber||1.4%|
Crude energy materials led the rise, with the price of coal nearly doubling over the last year. Oil and natural gas prices also rose amid war-related supply constraints and higher demand as people got back to pre-pandemic activities. This has far-reaching consequences for manufacturers given that oil and gas is widely used for transportation and heat, and is an input in thousands of products.
Wheat inflation in Canada reached 73.4%. The cost increase was partly due to a drought in Western Canada that reduced Canadian wheat production by nearly 40% from 2020 to 2021. Internationally, the Russia-Ukraine conflict also threatened wheat supply as the two countries normally account for almost a third of global wheat exports. Wheat inflation has affected food and fuel manufacturers the most, as it is used for livestock feed, biofuels, and a wide range of human food.
Simultaneously, the price of lumber increased by 42.1% because of an increased demand for housing, and flooding in British Columbia that reduced supply. This affects manufacturers who produce things like timber and plywood, and ultimately influences the cost of housing.
How Inflation in Canada Affects Manufacturers
Raw material inflation drives up manufacturers’ cost of doing business. Unfortunately, it isn’t the only price pressure they face. Ocean shipping costs are more than five times higher compared to when the pandemic began. Truck transportation costs rose by 15% from March 2021 to March 2022, based on the latest available data.
On top of this, manufacturers have to contend with supply chain disruptions, global uncertainty, and labor shortages. What can manufacturers do? A majority of manufacturers have been raising prices to pass on some of the additional costs to consumers.
|Response to Supply Chain Challenges||% of Manufacturers|
|Delay fulfilling customer orders||79%|
|Find alternative supplier of raw materials and other inputs||69%|
|Lay off workers||9%|
Over the longer term, manufacturers say they plan to build stronger relationships with customers and suppliers, source critical raw materials from two suppliers, and bring their supplier base and production closer to home.
Looking ahead, most manufacturers say they expect supply chain issues to be resolved some time in 2023—though they were last asked this question before the war in Ukraine began. The Bank of Canada also expects inflation in Canada to ease in the second half of 2023. In the meantime, manufacturers will be forced to adapt to rising costs.
Learn more about how CME helps manufacturers grow at home and abroad through programs, services, and advocacy.
Operational Health Tech: A New Billion Dollar Market
Operational health tech is poised to be a multi-billion dollar industry. This graphic breaks down how its disrupting healthcare as we know it.
Operational Health Tech: A New Billion Dollar Market
Many lessons were learned throughout the COVID-19 pandemic, but what has become most apparent is the need to invest in healthcare on all fronts. In fact in just a few short years, businesses, governments, and consumers have had to entirely reassess healthcare in ways not quite seen before.
What’s more, this elevated importance placed on health could be here to stay, and one area in particular is poised for significant growth: operational health tech.
The graphic above from our sponsor Bloom Health Partners dives into the burgeoning market that is operational health tech, and reveals the key driving forces behind it.
What is Operational Health?
To start, operational health is an industry that provides health services to employees to help keep companies running smoothly.
A critical piece of operational health is workplace health, which is expected to soar in value. From 2021 to 2025, the market for workplace health is expected to grow 200% from $6.5 billion to $19.5 billion.
The industry is undergoing a tremendous amount of innovation, specifically in relation to technological advances.
Operational Health Tech: Disrupting Healthcare
The operational health tech industry is disrupting traditional healthcare by providing direct services to employees in the workplace.
For decades now, the U.S. has increasingly become a statistical outlier for healthcare spending relative to health outcomes. For instance, the average American incurs $9,000 in healthcare spending per year, nearly twice that of OECD countries, yet life expectancy is flatlining while other countries see rises.
A worsening and increasingly expensive health dynamic makes the environment ripe for disruption and is allowing for new ideas to be brought to the table.
In addition, people are already responding to these inefficient practices by shifting greater emphasis on health within the job market. For example, studies show that workers care more about healthcare benefits over the salaries when choosing an employer.
Going forward, employees will gravitate towards employers that provide standout health benefits like workplace healthcare options offered by operational health. Here are some additional factors that act as catalysts for this space.
1. Healthcare as Smart Business
What do companies that rank as some of the best to work for have in common? First, they all tend to outperform relative to the S&P 500 on a cumulative stock performance basis. Second, many offer superior healthcare benefits.
Moreover, from 2012 to 2022, companies that were the best to work for saw shares appreciate nearly 500%, compared to around 300% for the broader market. Data like this suggests investing in healthcare and keeping employees happy is smart business that pays dividends.
2. Healthcare as a Differentiator
Since 2020, labor markets have changed dramatically. As a result, employees now have more options and are much more selective about where they work. This is evident from the difference between job openings and hires which has risen to unrecognizable levels. For example, the data shows that there are nearly 12 million job openings, but only around 6-7 million hires in 2022.
Altogether, with an oversupply of jobs relative to workers, employers will have to find new ways to differentiate. One way to stand out is through healthcare and initiatives around operational health tech.
3. The Looming Mental Health Epidemic
Today some 700 million people suffer from some form of a mental health condition and COVID-19 has continued to exacerbate the problem.
Moreover, the cost of mental health for the global economy is estimated to be a whopping $6 trillion by 2030, over double compared to the $2.5 trillion figure in 2010.
Under the umbrella of services operational health tech covers, mental health will stand to benefit. Especially in the years to come as we look for new ways to combat its mounting costs.
Investing in Operational Health Tech
Bloom Health Partners is an operational health tech company looking to revolutionize workplace health by supplying employers with data to better understand their employee base and business.
One way Bloom stands out is with Bloom Shield—its flagship cloud-based big data platform for employee health data management. With Bloom Shield, new health insights become available to make better decisions. Employers can get insight into demographic data and age trends within the workplace, pre-screening detection for cancer and diabetes, and testing for management to tackle the spread of disease.
Click here to learn more about investing in operational health tech with Bloom Health Partners.
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