Coal news and updates

American Electric Power, one of the nation's largest electric utilities, said Tuesday its total coal burn in 2014 should be around 56 million short tons, comparable to 2013 if not a bit higher.

 

The Columbus, Ohio-based company, during a presentation viewed online from an Edison Electric Institute conference in Orlando, Florida, said its regulated business is expected to burn about 40 million st of coal next year, its competitive fleet about 16 million st.

 

AEP already has contracted for 78% of the 2014 coal for the regulated business, comprising AEP's electric utilities in several states, while 95% of the coal has been committed for its competitive sector.

AEP projects an average delivered price of $45/st for its regulated business and $58/st for its competitive business in 2014.

 

For the company's AEP East regulated business, next year's coal supply is divided fairly evenly among three basins: Powder River Basin, 39%; Northern Appalachia, 33%; and Central Appalachia, 28%.

 

PRB coal is expected to account for 76% of the supply for the AEP West regulated business next year, with lignite coal filling in the remaining 24%. On the competitive side, 74% of the coal will come from Northern App, 12% each from the Illinois Basin and Central App, and 2% from the PRB.

 

Tammy Rideout, an AEP spokeswoman, said the company expects to burn around 55 million st in 2013, so next year's burn could be a little higher.

 

Part of the reason for that is because AEP does not plan to retire any coal units in 2014. The company has already retired the 450-MW Philip Sporn Unit 5 in West Virginia and the 165-MW Conesville Unit 3 in Ohio.

 

But after 2014, the planned retirement of older coal units is set to accelerate. AEP intends to shutter about 5,000 MW of coal capacity in 2015 in several states, including Kentucky, Indiana, Ohio, Virginia and West Virginia.

 

Altogether, AEP plans to idle more than 6,000 MW of coal capacity, mostly in the Midwest.

 

According to the company, existing environmental regulations and market conditions are forecast to drive a 64% increase in natural gas capacity and a 27% decrease in coal capacity in 2016.

 

AEP's coal burn has slowly declined over the past several years. The company once consumed in excess of 70 million st annually, but that figure had dropped to 57.1 million st by 2012.

 

 

 

Source: www.platts.com