It seems that most financial stories these days must begin with “due to the coronavirus,” so here goes: due to the coronavirus, the use of coal in the production of electricity has plummeted so far this year. But while it is true that the virus-related shutdown has kneecapped energy consumption, the demise of coal as a viable energy source was well underway before the pandemic. COVID-19 just gave it a push.
And while the environmental and health benefits are manifest, the dramatic shift toward other sources was driven by a much more fundamental force: economics. The war on coal was instigated by activists, but it was ended by investors, and coal has been vanquished.
According to the U.S. Energy Information Agency, coal-fired electricity generation in 2019 fell to the lowest level in 42 years. Cheaper and cleaner natural gas supplanted much of the demand, but renewables collectively surpassed coal for the first time. Less than one quarter of U.S. electricity came from coal last year, down from about half just 12 years ago.
Meanwhile, employment in the mining of the stuff has fallen by half since 2012 and now comprises just 0.03% of the civilian labor force. And the trend is sure to accelerate. EIA still projects that coal will supply 13% of US electricity by 2050, but that number is almost surely too high. Here in the Tennessee Valley, TVA shuttered one of its six remaining plants in February and announced the closing of another in 2023. The producer has already reduced its share of coal-fired output from 58% in 2007 to just 17% in 2019.
And the United States is behind the curve relative to the rest of developed world. In the United Kingdom, where coal stoked the Industrial Revolution and once provided 80% of British electricity, there will be zero operational coal-fired plants by 2025. Germany plans a total phase-out by 2038. And even China and India, while still heavily dependent, are taking significant steps to promote more renewable replacements.