Gas overtakes coal again in US power generation
OREANDA-NEWS. October 30, 2015. US power plants generated more electricity from natural gas than coal at the peak of the 2015 cooling season, marking a new milestone in shifting use trends of the fuels.
Gas overtook coal for US electricity generation for the first time in May, then again in July and held that position through August, according to the August Electric Power Monthly report the US Energy Information Agency (EIA) released yesterday. The 0.4pc edge that gas held in July over coal widened to 2pc in August, as a mild summer and strong supplies of gas pushed that fuel's prices to record lows.
Coal on an annual basis still accounts for significantly more US power generation than gas, but the difference has been narrowing amid the boom in shale drilling that has made gas competitive with coal on price in many regions. Coal-fired power plants in 2008 generated twice as much power than gas plants. But by 2014 coal power generation was only 40pc more than natural gas.
Total coal burn by US power plants fell by 9pc year over year to 74.1mn short tons (67.3mn t) in August, according to the EIA. Natural gas use by the power sector was 14pc higher year over year, at an average 34 Bcf/d.
The supply mix trend has likely already reversed. Gas-fired power generation and electricity demand in the US typically peak in July-August. Gas-fired generation gradually decreases as electricity demand falls in spring and fall while winter heating demand pushes up natural gas prices and makes gas-fired power plants less competitive.