A Record Build Year Meets the Slowest Retirement Year Since 2008. The US Is Adding Capacity Faster Than It Can Use It Well

Two numbers published by the Energy Information Administration in February frame the US power sector in 2024. Developers and plant owners plan to add 62.8 gigawatts of utility-scale capacity this year, 55% more than the 40.4 GW added in 2023, which was itself the largest addition since 2003. Operators plan to retire only 5.2 GW, a 62% fall from the 13.5 GW retired last year and the smallest figure in any year since 2008. The EIA expects a record 36.4 GW of utility-scale solar in 2024 if developers meet their schedules, nearly double the 18.4 GW added in 2023, which was also a record.

Solar's share of additions is not a forecast of solar's share of firm capacity. A gigawatt of solar contributes a full gigawatt at midday on a clear summer day and almost nothing after sunset. After 22.3 GW of coal capacity retired over the past two years, only 2.3 GW is scheduled to close in 2024, about 1.3% of the coal fleet operating at the end of 2023. Operators expect coal retirements to rise again to 10.9 GW in 2025.

There are several reasons retirements might be slow in a given year. Wholesale electricity prices at most major hubs fell in 2023 and traded in narrower ranges than in the volatile 2022. The low prices of 2023 were driven mainly by fuel costs, not by a structural surplus of firm capacity. The combination of record additions and minimal retirements creates a specific risk: a system that is long on midday energy and not obviously long on winter evening capacity.

The retiring fleet, mostly coal and older gas, was built to run through exactly those conditions. The risk is that a good year is read as evidence that the problem has gone away. If a meaningful share of the 2024 additions turned out to be longer-duration storage or firm resources, the mismatch would narrow.