Dive Brief:

• Natural gas prices have risen significantly compared to last year, leading the U.S. Energy Information Administration to conclude that generation from coal resources will likely exceed gas' share for full-year 2017.
• Coal generation had topped natural gas every year until 2016, and the agency says it expects natural gas and coal to generate roughly equal amounts of energy in 2018.
• Non-hydro renewable sources are forecast to supply nearly 10% of U.S. generation in 2018, up from about 8% in 2016.

Dive Insight:

If it were a horserace, EIA is predicting a photo-finish. But for the coal industry, the agency's recent Short Term Energy Outlook is a clear sign that the fuel will remain a viable option for years to come.

This year, EIA predicts coal will generate 3.453 billion kWh/day compared with natural gas' 3.432 billion kWh/day.

Non-hydro renewable resources are expected to generate 1.035 billion kWh/day this year. Total generation from all sources will be slightly more than 11 billion kWh/day.

According to EIA, gas supplied an estimated 34% of total U.S. electricity generation in 2016 compared with 30% for coal. But that surge in gas generation was fueled by sustained low gas prices. The average price to generators was $2.88/MMBtu in 2016, compared with $3.58/MMBtu in the first half of 2017.

Gas generation declined to about 29% of the mix in the first half of this year, while coal's increased to about 30%.

The reason is not all price, however. EIA said another reason for the decline in natural gas generation so far this year is "the strong increase in conventional hydroelectric generation, particularly in the western states." Hydropower in the West supplied 32% of the census region's power in the first half of the year, compared with 27% during the same period last year.

The higher cost of fuel will have an impact on electricity costs: Average retail costs for residential customers will average $0.132//kWh this summer, up almost 4% from summer 2016.

Generation sources are in a state of flux: In the last STEO, EIA revealed output from United States renewable generation exceeded nuclear in March and April—something not seen since 1984. But the agency noted the shift was highly seasonal, and not likely to continue this year.