EIA: Coal production increases will continue through 2018

Dive Brief:

Coal production is up and will continue to rise through next year, according to the U.S. Energy Information Administration's latest Short Term Energy Outlook.
Coal production for August was the first month since October 2015 where production topped 70 million short tons (MMst).
But EIA also noted that utility-scale solar is rapidly growing. Capacity at the end of 2016 was 22 GW, and the agency expects that to reach 29 GW by the end of this year and 33 GW by the end of 2018.

Dive Insight:

EIA's monthly outlook is a mixed bag, showing growing gas and coal production as well as rapidly increasing renewables capacity. Coal is expected to remain the top generating source through the end of next year, in part due to rising gas prices, but after that its share may decline.

The agency expects the share of U.S. utility-scale electricity generation from natural gas to fall from an average of 34% in 2016 to about 31% this year. During the same period, coal's forecast generation share rises from 30% to 31% in 2017. Looking ahead, EIA says projected generation shares for natural gas and coal in 2018 average 31% and 32%, respectively.

It's positive news for coal, particularly along with production data.

Coal production for August 2017 was estimated to have been 74 MMst, or about 8% higher than August 2016. Production for the first eight months of this year was 14% higher than the same period last year, EIA said, and full-year production is expected to increase by 8% in 2017 and by 2% in 2018.

At the same time, dry natural gas production is forecast to average 73.7 billion cubic feet per day (Bcf/d) in 2017, a 1.4 Bcf/d increase from the 2016 level. Gas production next year is expected to be 4.4 Bcf/d higher than the 2017 level.

Despite the higher production, prices will rise due to "expected growth in natural gas exports and domestic natural gas consumption," EIA noted. Henry Hub gas spot price will rise from an annual average of $3.05/MMBtu in 2017 to $3.29/MMBtu in 2018, the agency predicted.

Wind electricity generating capacity closed out last year at 82 GW, but EIA expects that to reach 88 GW by the end of this year and 96 GW by the end of 2018. Total utility-scale solar electricity generating capacity at the end of 2016 was 22 GW, and the agency expects an increase of 50% by the end of 2018.

As for emissions, after declining 1.7% in 2016, EIA said energy-related carbon dioxide emissions are projected to decrease by 0.5% in 2017 and then to increase by 2.6% in 2018.