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February 1, 2021 2:00 PM, EST

Coal to Exit US Power System by 2033, Morgan Stanley Says

Metallurgical coal is loaded onto a barge in Ceredo, W.Va. (Luke Sharrett/Bloomberg News)Metallurgical coal is loaded onto a barge in Ceredo, W.Va. (Luke Sharrett/Bloomberg News)

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Coal is on track to disappear from the U.S. power grid by 2033 as the push for a carbon-free electricity system gains strength, according to Morgan Stanley.

The fossil fuel will be supplanted largely by renewables, which will supply 39% of U.S. electricity in 2030 and 55% in 2035, according to a report Feb. 1 from Morgan Stanley. The shift comes as a growing number of states implement laws mandating utilities eliminate carbon emissions from their fleets.

Coal supplied about 20% of U.S. electricity last year and may rebound to as much as 22% in 2021 as higher natural gas prices prompt utilities to shift their fuel mix, according to Energy Department forecasts. But that short-term rebound won’t overcome the global shift toward cleaner sources of electricity, a trend that’s getting a big push from President Joe Biden’s pledge to put the U.S. on a path to an all-green power system.

Gas prices may climb 48% this year, which “drives coal generation and the sector’s carbon footprint to increase in 2021 but we continue to project a constant decline thereafter,” Morgan Stanley analysts said in the report.

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