* Coal retirement/retrofits to cost up to $144 billion
* Brattle says up to 77,000 MW of coal could shut
* Higher natural gas prices will reduce coal retirements
By Scott DiSavino
Oct 8 (Reuters) - More U.S. coal-fired power plants couldretire due to environmental regulations and weaker-than-expectedelectric demand, costing the industry up to $144 billion,economists at consultancy Brattle Group said.
In a new study, Brattle's economists forecast 59,000 to77,000 megawatts (MW) of coal plant capacity would likely retireover the next five years.
That was about 25,000 MW more than the firm had estimated in2010, Brattle said in a release. There is about 317,000 MW ofcoal-fired capacity now in the United States.
Brattle estimated more coal units would shut than otherrecent studies, including a report by the power industry'sresearch arm Electric Power Research Institute that forecast36,000 to 61,000 MW could shut over the next several years. Onemegawatt can power about 1,000 homes.
"Everything else being equal, this amount of retirement willbe enough to increase prices in both electric and gas marketsfor a few years, but we do not envision that impact to be largeor persistent enough to alter retirement decisions," FrankGraves, Brattle principal and co-author of the study, said.
The economists estimated the power industry would have toinvest $126 billion to $144 billion to retrofit and replace thecoal capacity.
Since December 2010, when Brattle released its priorestimates of coal plant retirements, natural gas prices and theprojected demand for power have decreased.
The economists said these shifts in market conditions hadresulted in an acceleration in announced coal plant retirements.
As of July 2012, generating companies had announced theretirement of some 30,000 MW of coal plants (roughly 10 percentof total U.S. coal capacity) by 2016, Brattle said. For factboxon coal plant retirements, click on
But the U.S. Environmental Protection Agency still has tofinalize some rules related to emissions, cooling water and coalash.
To reflect the remaining environmental uncertainty, Brattlesaid its economists had developed "strict" and "lenient"scenarios, with about 59,000 MW likely to retire under lenientrules versus 77,000 MW under strict regulations.
NATURAL GAS FACTOR
The economists said natural gas prices would play a majorfactor in determining the number of coal plants to retire.
Retirements would drop to between 21,000 and 35,000 MW ifnatural gas prices increased by just $1 per million Britishthermal units (mmBtu) relative to April 2012 forward prices.
If gas prices fell by $1, the economists projected coalretirements would increase to between 115,000 and 141,000 MW.
Natural gas prices in April bottomed at $1.90 per mmBtu.Over the past decade, natural gas has traded in a wide rangefrom less than $2 to more than $15, averaging about $6. Thecurrent spot cost is $3.35.
The biggest coal-fired generation companies in the UnitedStates include units of American Electric Power Co , DukeEnergy Corp , Southern Co , Xcel Energy Inc, GenOn Energy Inc and FirstEnergy Corp .
(Reporting by Scott DiSavino in New York; Editing by DaleHudson)
Keywords: UTILITIES BRATTLE/COAL