According to new projections from the U.S. Energy Information Agency, coal will continue to regain market share in electricity generation as its competitive position with natural gas continues to improve.
According to the report, coal generated at least 40 percent of U.S. electricity from November of last year through March, taking a clear lead over natural gas, which a year ago had equaled coal but which is losing some appeal as its cost rises.
Natural gas’ share fell to 25 percent in the same period, according to preliminary figures from the U.S. Department of Energy’s Energy Information Administration (EIA). In April 2012, the two fossil fuels both accounted for 32 percent, marking the first time natural gas had matched coal since EIA started tracking the fuels’ contributions.
The equality was short-lived. As EIA observed:
“Since May 2012, a combination of higher prices for natural gas and increased demand for electricity during the summer months led electric systems across much of the country to increase their use of coal-fired units. In March 2013, coal-fired units generated a little over 130,000 megawatt hours of electricity, while natural gas units produced nearly 85,000 megawatt hours. Heading into the 2013 spring shoulder season (between winter and summer), when demand for electricity typically falls, higher prices for natural gas reduced the fuel’s share of total generation below the record levels of last April.”
While coal’s power generation cost has dipped slightly from $2.41 per million Btu (British thermal unit) in March 2012 to $2.35 per million in March 2013, natural gas has risen from $2.96 per million Btu to $4.30 per million in the same period, a separate EIA report shows. The agency forecasts that gas will rise to $4.74 next year while coal will nudge up to $2.44.