Coal news and updates

Natural gas generation poised to nearly equal coal in April, May: US EIA

Generating power with natural gas will come close to equaling generation from coal in April and May, the US Energy Information Administration predicts in its May Short-Term Energy Outlook report, released Tuesday.

Coal and gas generation are expected to make up 31.7% and 30.7%, respectively, of all generation in the US in April, EIA said. For May, EIA predicts coal to make up 33% of all generation and gas to account for 31.6%.

Recent low gas prices have significantly increased the use of the fossil fuel rather than coal for generation, the EIA said, with utility switching in April and May resulting in the closest convergence in generation shares between the two fuels since April 2012, when gas prices neared record lows.

Coal consumption in the electric power sector will fall 6% in 2015, making up 35.8% of all generation, the EIA said. The use of gas-fired generation is projected to average 30.6% of total generation in 2015 compared with 27.4% during 2014.

Milder weather in first-quarter 2015 compared with the same period of 2014 and lower gas prices are primary factors driving the decline of coal burn, the agency said. Facing tougher emission rules, the retirements of coal power plants also affect demand in the power sector and contribute to the decline.

The full effect of coal plant retirements will be felt in 2016, but projected rising electricity demand and higher natural gas prices will boost the use of the remaining coal-fired fleet, mitigating retirements by 2% as projected coal consumption in the electric power sector increases.

US COAL PRODUCTION ON PATH TO 28-YEAR LOW

EIA also estimates that US coal production will fall 7.1% this year to 926 million st from 997 million st in 2014, as both domestic demand and exports continue to decline. If the EIA's estimate holds, it would be the lowest annual total for US coal production since 1987, when 918.8 million st was produced.

There will be a decline in all coal-producing regions, the agency said, with the largest decline occurring in Appalachia, a 13% year-on-year drop to about 236 million st from 270 million st. Production in the Interior region will fall 2.1% to about 183 million st, and production in the western regions will fall 5.2% to about 511 million st.

source: http://www.platts.com