Friday 25 November 2016

Coal to overtake gas for US power this winter

Coal to overtake gas for US power this winter

Coal is predicted to overtake gas as the most commonly used source for electricity in the US this winter.

This reversal of recent trends in fuel source generation is the result of the changing price of natural gas, according to the Energy Information Administration (EIA).

Natural gas has long been the second most commonly used fuel to generate power, after coal. Gas overtook coal to become the main fuel source for the first time in April 2015 and most months since.

For the first six months of 2016, gas made up 36% of the generation share while coal made up 31%. This summer saw gas power generation reach record levels, largely due to the fact it cost $21.30/MWh (£17.10/MWh), substantially cheaper than coal.

Now gas prices have risen so the costs are similar again but are forecast to keep on rising whereas the price of coal is likely to stay relatively stable, adds the EIA.

It believes the difference in price will encourage the industry to use more coal, which is predicted to be the primary fuel source again in December, January and February.

In February, gas prices are expected to hit $31/MWh (£24.88/MWh), around 40% more than coal.

By mid-2017, increased renewable generation is expected to reduce the share of both coal and gas.

Written by

Bruna Pinhoni

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