Dive Brief:
- Gas-fired power plants generated more energy than coal did in seven months last year, the U.S. Energy Information Administration revealed last week. It is a remarkable turnaround, give prior to 2015 gas' share of generation had never exceeded coal.
- Natural gas generated 109,646 GWh in December, compared to 89,649 GWh from coal plants.
- Coal still finished the year ahead, but only by a thin margin — 1,356,057 GWh for coal, and 1,335,068 GWh for gas.
Dive Insight:
Gas prices have remained so cheap that utilities are accelerating their move away from coal. Platts points out that coal burn is down almost 30%, year-over-year, while gas' share rose more than 20%. 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.
Before 2015, natural gas generation had never surpassed coal, but it did so last year in April, and then the final six months of the year.
The country is moving quickly away from coal, and last year the EIA said coal production was declining in all regions, led by a 12% drop in the Appalachian region.
The United States shuttered a record number of coal-fired plants last year, but despite that, the EIA expects burn to remain steady this year as the remaining plants run more often. The agency believes from 2015 to 2016 coal consumption will fall only slightly, from 773.4 MMst to 773.0 MMst.
