EIA raises 2021 coal consumption outlook

Market: Coal, Electricity
10/11/20

The US Energy Information Administration (EIA) raised its outlook for coal consumption at US power plants in 2021 as higher natural gas prices are expected to result in fuel switching.

EIA expects the US electric power sector to consume 546mn short tons (495mn metric tonnes) of coal in 2021, up from an expected 443mn st this year, according to the agency's latest Short-Term Energy Outlook.

The agency raised its 2020 and 2021 coal-burn forecasts by 10mn st and 24mn st, respectively, compared with last month's report.

The agency now expects coal power this year to be 780bn kWh. That is 2.3pc greater than EIA projected last month but still down from actual coal generation of 959bn kWh in 2019.

In 2021, coal generation will rise to 963bn kWh, the agency projected today. EIA's forecast last month for 2021 was 917bn kWh.

Coal's share of total generation in the US is expected to climb to 25pc in 2021 from 20pc this year.

Natural gas generation in 2020 is expected to climb to 1,500bn kWh, up from 1,477bn kWh in 2019. EIA expects power plants to cut natural gas generation by 15pc next year to 1,274bn kWh.

Natural gas's share of generation is expected to fall to 33pc in 2021 from 39pc this year.

Renewable generation will total 763bn kWh in 2020 and account for 20pc of the US' generation fuel mix. It will then rise to 840bn kWh, or 22pc of the market, in 2021, still lagging coal. EIA previously projected renewable power would total 755 bn kWh in 2020 and 845bn kWh next year.

EIA expects overall power demand to climb by less than 1pc in 2021 to 3,876bn kWh.

Increased heating demand in early 2021 is expected to be offset by forecasts calling for fewer cooling degree days during the third quarter of next year, EIA said.

Generators will switch away from natural gas in 2021 as prices are expected to average $3.14/mmBtu for the year, up from an average of $2.14/mmBtu this year, EIA said.

To meet the increased power demand, coal production in 2021 is expected to climb to 627mn st, up from an expected 521mn st this year. EIA this month lowered its 2020 coal production forecast by 4mn st and raised its outlook for 2021 by 2mn st.

EIA's latest 2020 production forecast is 26pc lower than last year's coal output.

EIA lowered its outlook for coal exports this month. The agency expects thermal and metallurgical coal exports to total 63.6mn st this year, a 3pc drop from October's projection of 65.4mn st. Exports are expected to climb to 64.7mn st next year, down by 8.5pc from last month's forecast.

By Jim Foster

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

News

16/11/24

Cop: Colombia’s climate plan to address fossil fuels

Baku, 16 November (Argus) — Colombia will seek to address the "divisive issue" of "the proliferation of fossil fuels" in its next emissions reduction plan — nationally determined contribution (NDC), environment minister Susanna Muhammad told Argus, adding that it would prompt a "strong debate" in the country. Colombia's president Gustavo Petro seeks to end the country's dependence on fossil fuels, while promoting a transition to clean and renewable energy. "Of course this is a very divisive issue, especially for a country that is looking for a whole economy transition," Muhammad said on the sidelines of the UN Cop 29 climate summit in Baku. "And trying to get the whole of society and the whole of government behind that will be a strong debate." Petro ordered an end to new hydrocarbon exploration and production contracts soon after taking office in August 2022. Petroleum association ACP said that Colombia's crude output will begin declining in 2027 as reserves are insufficient to maintain output amid falling exploratory activity. Petro's ambition to phase out fossil fuels risks sacrificing key revenues for the country. But Muhammad highlighted the need to achieve an ambitious financial goal that supports a just transition in developing economies. "We cannot continue playing with the same financial rules of the game," she said. "What we are seeing at this Cop 29 is that we need solidarity and fairness in the process of financing this transition." "We said in Dubai that we would triple renewables by 2030. The question remains, who is going to triple renewables and for whom?" she said, pointing to the significant gap in renewables expansion between developed and developing economies. Countries at Cop 28 in Dubai, the UAE, last year agreed on a deal that included transitioning away from fossil fuels, tripling renewable energy capacity and doubling annual energy efficiency gains globally by 2030. Muhammad added that the country will be submitting its NDC to the UN climate body the UNFCCC by June next year because it will "go through a very strong consultation process" with different sectors of the economy. Cop parties are expected to publish their next NDCs to the Paris climate agreement — this time for 2035 — in November-February, as part of a cycle that requires countries to "ratchet up" their commitments every five years. "Our main source of emissions is deforestation, agriculture practices, especially cattle ranching," she said, adding that the government is seeking the participation of actors that are at the forefront of the climate crisis. Risky business Talking about the possibility of the US pulling out of the the Paris Agreement and Argentina's delegation exiting negotiations in Baku, she warned that by not putting the people first in the fight against climate change, leaders are risking that other "authoritarian" regimes or "climate deniers" take more power. Brazil's secretary for climate change Ana Toni said today that private companies like policy consistency and that businesses need to look at the countries that are showing climate commitment and consistency in their NDCs. "The climate crisis is irreversible, we need to focus on climate action and implementation," Toni said. By Jacqueline Echevarria Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Find out more

News

Brazil looks beyond forests to reduce CO2

15/11/24

News

15/11/24

Brazil looks beyond forests to reduce CO2

Sao Paulo, 15 November (Argus) — Brazil will target energy and transportation emissions as part of its nationally determined contribution (NDC) it outlined ahead of schedule, as the country prepares to host the Cop 30 conference in Belem, Para state next year. The government's goal with the new NDC is to "lead by example" by committing to the more aggressive emissions-reduction targets. The new NDC, which was released ahead of the UN Cop 29 climate change conference in Baku, Azerbaijan, aims to go beyond deforestation — which causes roughly half of the country's emissions — to include other sectors of the economy, including industry, transport, energy and agriculture. Under the new proposal, Brazil will aim to reduce greenhouse gas emissions by 59-67pc from 2005 levels by 2035, equivalent to emissions levels of 850mn-1.05bn metric tons of CO2 equivalent (tCO2e). The government promised to finalize the targets for each sector of the economy during the first half of next year. On the energy and transport fronts, Brazil is seeking to further expand the use of renewables, which currently stand at 89pc of electricity and 49pc of total energy consumption. To reduce emissions from this sector, the government plans to gradually reduce the use of fossil fuels and to replace them with electric motors and biofuels. Additionally, the government cited policies that have been approved this year, including the low-carbon hydrogen law and the fuels of the future law, which will reduce emissions from the industrial and transport sectors. The government also underscored the expanded use of advanced biofuels and the production of conventional biofuels in conjunction with carbon capture to reduce energy emissions. The plan singled out the waste-management sector for its potential to contribute to methane emissions reductions while generating renewable energy from CH4 capture. It cited the expansion of biomethane use, to reduce the use of LPG and natural gas in cooking. For the agriculture sector, the government is targeting large-scale conversion of degraded pastures into crop land, as well as the expanded use of new farming techniques, such as crop-livestock and crop-livestock-forest integration. Additionally, the government promised to expand its efforts to combat deforestation beyond the Amazon basin into new biomes, including the Atlantic rainforest, Pantanal, pampa and cerrado tropical savanna biomes. The government has also launched a plan to reforest roughly 12mn hectares of forests by 2030, which would contribute to the country's net GHG removals. Some Brazilian NGOs commended the government for issuing the new NDC ahead of schedule, and for citing concrete measures that will be adopted to reduce GHG emissions. But they warned that the new NDC is not in line with the goal of limiting global warming to 1.5°C above pre-industrial levels. Climate NGO Greenpeace classified the new target as "unambitious" and "clearly insufficient," while Brazilian climate think tank Observatorio do Clima criticized the government's failure to increase its targets for 2030. Observatorio do Clima, along with roughly 100 other NGOs, issued a report earlier this year calling on Brazil to adopt a much more aggressive target to slash CO2 emissions by 92pc from 2005 levels by 2035, equivalent to 200mn tCO2e/y. While the NDC did cite policies aimed at reducing dependence on fossil fuels, Observatorio do Clima criticized the government's failure to announce a plan to end the expansion of fossil-fuel use. This sentiment was echoed by Oil Change International, which said that Brazil's goal of being on the "forefront of the global energy transition" is incompatible with its plans to increase oil production over the next decade. Observatorio do Clima also criticized the lack of clarity regarding its plans to double renewable energy capacity and triple energy efficiency. It also questioned the government's deforestation goals, arguing that all deforestation, not just illegal deforestation, needed to be eliminated. 2023 Brazil emissions sources Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Cop: Parties back battery storage, grids and H2 pledges

15/11/24

News

15/11/24

Cop: Parties back battery storage, grids and H2 pledges

Baku, 15 November (Argus) — Parties including the US, the UK, Germany, Brazil, the UAE and Saudi Arabia on Friday endorsed pledges on energy storage and grids, and low-carbon hydrogen put forward earlier this year by the UN Cop 29 summit presidency. The pledges aim to increase battery storage capacity six-fold by 2030, from 2022 levels, and enhance energy grids, as well as unlock the potential for a global market for low-carbon hydrogen and its derivatives. It is unclear how many countries have endorsed the pledges so far. Some government representatives, international energy agencies and private sector firms showed their support today to the Cop pledge aiming to enhance grid capacity through a global deployment goal of adding or refurbishing 25mn km of grids by 2030. The commitment also recognises the need "to add or refurbish an additional 65mn km by 2040 to align with net-zero emissions by 2050". "Achieving the grid's target would require the build-up rate to increase by double," energy think-tank Ember said today, adding that the 1,500GW storage goal can be exceeded "significantly". The battery storage goal is in line with what the IEA said is needed to meet the goal of tripling renewable energy capacity by 2030, while maintaining energy security. The commitment was taken last year during Cop 28 in Dubai. The IEA expects that most projects will be located in China and developed economies. Delegates called for national targets for energy storage and power grids as well as for more energy connectivity and trade to be able to decarbonise countries faster and to support regional energy cooperation. "Cross-border energy in Asia Pacific remains mainly in bilateral contracts," said a representative from the region. Parties highlighted the urgency to accelerate energy investment, with the International Renewable Energy Agency (Irena) calling for a new finance goal for developing countries — currently under negotiations — that reflects the need of financing these nations need to accelerate their clean energy expansion. Clean energy investments in emerging and developing countries outside China have risen to $320bn in 2024, according to the IEA. But a representative from Egypt pointing out that over $1 trillion per year is needed for these countries' transition. Saudi Arabia supported both of the pledges, while reiterating that natural gas storage and carbon and capture storage was needed to be able to guarantee stable energy with less emissions. US energy secretary Jennifer Granholm said that the battery storage and grid pledges at the summit will set the tone at next week's G20 where she hopes countries set a similar target. By Jacqueline Echevarria Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Cop: Granholm calls for more efforts if US quits Paris

15/11/24

News

15/11/24

Cop: Granholm calls for more efforts if US quits Paris

New York, 15 November (Argus) — Countries at the UN Cop 29 climate summit in Baku, Azerbaijan, need to double down their efforts to fight climate change even if the US withdraws from the Paris Agreement, US energy secretary Jennifer Granholm said. Granholm pointed out that seven years ago, when the US government abandoned international cooperation on climate, the international stage stepped forward to lead climate efforts. US states and cities also stepped up to fill the void left by the absence of federal policy, she told delegates at a high-level meeting. "Climate has never been only about the US, it has been about all of us", adding that no other country should think about pulling out of the Paris accord. Granholm highlighted that the country's policies to support the clean energy economy will ensure that investment in clean energy technologies will continue in the US. Her comments were in line with US climate advisor John Podesta's earlier this week . "We are keeping the US climate movement alive by taking every action available thanks to a strategy that lays the foundation for decades of climate and clean energy progress that will continue to grow faster than ever before." she said. The US is projected to add more than 60GW of clean energy in 2024, more than twice the amount achieved in a previous year, according to Granholm. She added that the US has invested over $1.5 trillion in clean technologies and infrastructure as a result of this industrial strategy. With businesses and consumers investing $6 for every dollar of federal investment. By Jacqueline Echevarria Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Latin America can harness energy transition: World Bank

14/11/24

News

14/11/24

Latin America can harness energy transition: World Bank

Montevideo, 14 November (Argus) — Latin America and Caribbean countries have the resources the world needs for the energy transition, but need to make substantial changes to benefit from them, a World Bank official said. The region is focused on producing a long list of resources, from critical minerals to low-carbon hydrogen, for the energy transition. It produced resources for economic transformations in the past, but did not reap benefits. This time it could be different. "We still have the problem of opportunities being left on the table," William Maloney, the World Bank's chief economist for Latin America and the Caribbean, told Argus . He said the region should look to Nordic countries. "What we want to do is avoid another cycle of saying ‘okay, take our resources and give us 30pc, so we have budget support,' " he said on the sidelines of a bank-sponsored conference on innovation in Montevideo, Uruguay. The region is home to more than 50pc of lithium resources worldwide, according to the US Geological Survey, and also dominates in reserves of critical metals, including copper, silver and tin that are used in different components of the energy transition. It has vast natural gas reserves from Trinidad and Tobago down to Argentina. Maloney said the region should look at what Sweden has done with its forestry sector and Norway with oil. He said that Sweden's forestry sector has a network of state and private institutions working together to create knowledge and add value to the products. "This is what we have to do with our lithium, natural gas or oil," he said. Forestry products accounted for 8.6pc of Sweden's export earnings in 2023, according to the government's statistics agency. He said Norway came up with a plan when oil was discovered that allowed the oil majors to produce, but contracts included specific clauses on knowledge transfer and technology that let the country develop its own petroleum industry. Oil and gas accounted for 62pc of Norway's exports in 2023. It has 48.2 trillion cf of natural gas and in 2023 was the fourth natural gas exporter after the US, Russia and Qatar. "The idea is to approach foreign capital and foreign technology with ideas that go beyond taxes and beyond employment to learning how to do things ourselves," he said. "It does not have to be us or them, there is a negotiation to be had." By Lucien Chauvin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more