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Coal to lose to gas in summer power generation

18 Apr 2017, 8.58 pm GMT

Coal to lose to gas in summer power generation

Washington, 18 April (Argus) — Coal will account for a smaller share of summer electricity generation than natural gas for the third straight year, according to US Energy Information Administration (EIA) projections.

Total summer electric output is expected to fall by 2.4pc to 1.16bn MWh, as milder weather causes an 11pc decline in cooling degree days compared with 2016.

As a result, coal-fired power will fall by 4.2pc and gas output will drop by 9.1pc. Coal will account for 32pc of the fuel mix, down from 33pc in summer 2016, while natural gas' share will sink to 34pc from a record 37pc last year.

Gas will lose out to other fuel sources as prices remain higher than 2016 levels. EIA projects that Henry Hub prices will average more than $3/mmBtu during June-August.

High levels of winter precipitation and snowpack in California will also help to displace gas, with hydropower expected to increase to a 27pc share if the generation mix in the western US, up from 20pc during summer 2016.

Despite this projected decline, the US power sector is expected to add 10.5GW in gas capacity by the end of August, for a 2pc increase over a year earlier. Renewable capacity continues to grow as well. Wind will add 9.2GW or 12pc by the end of the summer, while utility-scale solar capacity will increase by 7.5GW or 45pc.

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