Coal retakes the lead in US electric power generation

Friday, May 24, 2013

Coal has retaken its status as the leading fuel for electric power generation in the U.S., as both demand for electricity and natural gas prices increased.  Preliminary U.S. Energy Information Administration data show that 40% or more of the nation's electricity came from coal in each month between November 2012 and March 2013, with natural gas fueling about 25% of generation during the same period.  This is a partial reversal of the recent trend of natural gas replacing coal as a fuel for electric power generation.

Coal dominated electric power production for much of last century. From 2001 to 2008, coal powered between 48% and 51% of annual generation.  But in the past four years, increased production of natural gas from shales and other unconventional resources led to lower natural gas prices.  Combined with tighter environmental regulations on coal plants' air emissions, this led utilities and merchant generators to burn more natural gas and less coal.  By April 2012, coal and natural gas each contributed an equal share of electric power.

EIA's most recent data suggests that trend is slowing or has partially reversed.  For the five months from November 2012 through March 2013, more electricity was produced in the U.S. from coal than from natural gas.  For example, in March, coal-fired units generated just 130,000 megawatt-hours of electricity, while natural gas units produced just under 85,000 megawatt-hours.
Chart courtesy of U.S. Energy Information Administration, available at

Coal's share of total U.S. electricity generation remains well below its historic range.  Coal has not been responsible for 50% or more of power produced in any year since 2005, and the EIA's latest Short-Term Energy Outlook predicts that coal will contribute 40% of generation in 2013.  Natural gas remains relatively inexpensive throughout most of the year in most of the country, but regions like New England suffer from higher natural gas prices in winter due to inadequate pipeline infrastructure into the region.  Market forces and regulations will determine whether natural gas climbs back to parity with coal as a fuel for electric power generation.

No comments:

Post a Comment