Coal news and updates

Coal already losing ground to natural gas

American coal was first mined commercially in Richmond and today the U.S. is among the world’s major coal-producing nations.
 
The world’s largest reserves of coal are in the U.S., so much that the country is a net exporter. In 2013, however, U.S. coal mines produced just under 1 billion tons of coal, the lowest output since 1993.

The Richmond coalfield around Manakin produced America’s first coal in commercial amounts starting in 1748. Virginia consistently ranks among the top 10 coal-producing states in the nation.

Coal is the most valuable single mineral resource produced in Virginia, with about 22 million tons mined and an estimated value of $3 billion in 2011, according to the state’s Department of Mines, Minerals and Energy.

While coal has been the largest source of electricity generation in the U.S. for more than 60 years, its annual share of generation declined from nearly 50 percent in 2007 to 39 percent in 2013.

Historically, coal has been a relatively inexpensive fuel.

While some natural gas-fired power plants are more efficient than coal plants at generating electricity, in the past the fuel cost of generating electricity using natural gas typically had been higher than that of coal.

However, the recent surge in natural gas production from U.S. shale deposits substantially reduced the price of natural gas, and coal began losing its price advantage over gas for electricity generation in 2009, particularly in the eastern U.S.

Although coal-fired generation still holds the largest share among all sources of electricity, its use has also declined due to a combination of slow growth in electricity demand, increased use of renewable technologies and new environmental regulations that made it more costly to operate some coal plants.

According to the U.S. Energy Information Administration, electricity generated by new conventional coal-fired plants is nearly 50 percent more expensive than electricity generated by natural-gas combined-cycle power stations averaged over the plants’ lifetimes.

What the EIA refers to as the estimated levelized cost of electricity for new generation resources in 2012 dollars is $95.60 per megawatt-hour for conventional coal plants.

In contrast, the cost for electricity from a natural gas-fired, conventional combined cycle plant is $66.30 per megawatt-hour, the EIA said, and the cost from an advanced combined cycle gas plant is $64.40 per megawatt-hour.

Levelized cost of electricity is a measure of the overall competitiveness of different generating technologies. It represents the cost to build and operate a generating plant over an assumed financial life and duty cycle.

Virtually all of Virginia’s coal production takes place in the state’s southwestern coalfields, with the majority of production in Buchanan, Dickenson and Wise counties.

The state’s peak production year was 1990, the EIA reported, when its mines produced more than 46.5 million tons. In 2013, the state produced 17.1 million tons.

In 1990 the number of mining employees in Virginia was 10,342. Last year, the state’s coal industry employed 4,864 miners.

Source: roanoke.com