Coal news and updates

U.S. coal-fired power generation is set for a short-term recovery this summer as higher prices of coal’s main fossil fuel competitor, natural gas, will discourage parts of gas-fired electricity generation.

 

Natural gas prices are rising this year, and traded above $3 per million British thermal units (MMBtu) early on Monday, compared to less than $2 / MMBtu at this time last year. Reduced natural gas production and record-high American exports of liquefied natural gas (LNG) have fueled a rally in natural gas prices since the start of the year. The winter storms in February, which triggered the largest monthly drop in U.S. natural gas production on record, primarily due to freeze-offs in Texas, also played a part in rising natural gas prices as inventories drew down quick amid record residential consumption demand.  

 

As a result, going into the summer months, the cost of natural gas delivered to electric generators will be nearly 50 percent higher compared to last year, the Energy Information Administration (EIA) said. That cost is expected to average $3.13 MMBtu this summer, up by 46 percent compared to the summer of 2020 and close to the price during the summer of 2018.

 

Soaring costs of natural gas use are set to discourage gas-fired power generation at the expense of coal and renewables, with the coal increase more noticeable, according to the EIA.

 

“Higher fuel costs for natural gas-fired power plants this year means that those plants will be dispatched for electricity generation less often, while coal-fired power plants will likely be dispatched more often,” the EIA said in the Summer Electricity Outlook supplement to its Short-Term Energy Outlook (STEO) in May.

 

U.S. electric power sector generation from natural gas during the summer of 2021 is set to account for 37 percent of total generation, down from 42 percent last summer. On the other hand, U.S. coal-fired generation will rise and hold a 26-percent share of total generation in the summer of 2021, up from 22 percent last summer.

 

Source : https://oilprice.com/Energy