Dive Brief:

• Natural gas-fired power generation will top coal this year, according to new predictions from the U.S. Energy Information Administration. It is the first time gas is expected to best coal, and the agency released its estimate this week in its Short Term Energy Outlook.
• Gas is expected to fuel a third of the United States' power generation this year, compared to 32% from coal, EIA said. In 2017, the two will produce equal amounts of energy, the agency predicts.
• While new regulations and tight market conditions created challenging conditions for coal in 2015, the fuel still produced the biggest chunk of the United States' power. Coal produced 1,356,057 GWh last year, compared with 1,335,068 GWh for gas.

Dive Insight:

The writing has been on the wall – gas use trumped coal in seven month last year – but federal officials are finally predicting gas will exceed coal burn this year, marking a significant step in the transition away from dirtier sources of energy.

For renewables, EIA forecast the share of total electricity generation supplied by hydropower to rise from 6% in 2016 to 7% in 2017, and the forecast share for other renewables increases from 8% in 2016 to 9% in 2017.

"Coal generation is now expected to decline by 3% in 2016, in contrast to relatively little change forecast" in the previous short term energy outlook, EIA said. The agency expects that the share of total generation fueled by coal in 2016 will average 32%, lower than the 33.4% forecast share of generation fueled by natural gas. The projected generation share for both natural gas and coal average 32.3% in 2017.

Gas-fired power plants generated more energy than coal did in seven months last year. In the latest monthly data from December, natural gas generated 109,646 GWh compared to 89,649 GWh from coal plants.

Overall, EIA said total U.S. electricity generation in 2016 is expected to average 11.2 TWh each day, 0.4% higher than in 2015. Forecast total U.S. generation grows by an additional 1.6% in 2017.

While environmental regulations are taking their toll on coal facilities, cheap natural gas is also playing  a role. Gas prices have remained so cheap that utilities are accelerating their move away from coal, and with gas prices below $2/MMBtu the trend is likely to continue. Around the $2.50 mark is where utilities will typically switch back to coal, but prices below that mark have made it appealing for utilities to burn gas during this winter.