Coal’s kingdom shrinks below 40%, EIA data shows

Coal accounted for less than 40% of electric generation during November and December of 2011, its smallest share of the U.S. power market in more than three decades, the U.S. Energy Information Administration (EIA) reported March 9.

Only a few years back coal accounted for half of U.S. electric generation.

A combination of mild weather, leading to a drop in total generation, and the falling price of natural gas relative to coal contributed to the drop in coal’s share, EIA said in a recent update.

At 39%, coal was still the largest single source of electricity generated during December 2011. Natural gas was second at 26%, followed by nuclear at 22%, hydropower at 7% and all other sources, including renewables and oil, at 6%, according to EIA.

A year earlier, in December 2010, coal was at 46%, with gas at 22%, nuclear at 20%, hydro at 6% and other sources at 6%.

Total electricity generation was down 7% in December 2011 compared to December 2010. Despite this decline, generation from natural gas rose 12% to 86 terawatthours (TWh). Coal-fired generation, however, fell by 21% between December 2010 and December 2011, to 132 TWh, EIA said.

Natural gas prices have fallen significantly this winter, EIA said, pointing to February data that indicated that average natural gas spot prices were $2.68/mmBtu in January 2012. That’s about as low as the price has been in 10 years, with the exception of a four-day period around Labor Day 2009.

The low gas prices have allowed generators in some states, such as Ohio and Pennsylvania, to significantly increase their share of gas generation. Natural gas combined-cycle units operate at higher efficiency than do older, coal-fired units, which increases the competitiveness of natural gas relative to coal. As a result, some gas units previously used mostly for peaking are being dispatched more often.

“While coal is getting squeezed” by factors including cheap gas and tough government air quality standards, coal still provides “the backbone of baseload power,” said a spokesperson for the National Mining Association (NMA).

NMA officials also said that nuclear plants typically run at 90% capacity rate no matter what occurs with the market. In addition, coal’s percentage might look a bit better when EIA figures are revised with updated data, they added.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.