Coal fell to just 27.6% of US utility-scale power generation in
December, and the spread between it and natural gas-fired generation
widened to 616 basis points, the largest yet seen, according to
Energy Information Administration data out Friday.
The agency's Electric Power Monthly showed coal generation in
December totaled 89.6 TWh, up 2% from November but down 28.1% from
the year-ago month.
December natural gas generation totaled 109.6 TWh, or 33.8% of power
generation. The monthly total was up 6.9% from the prior month and
up 20.4% from the year-ago month.
Low-priced natural gas continues to upend the power market, as more
utilities are taking advantage of the cheap fuel and switching away
from coal for electricity generation.
While there is limited capacity for coal-to-gas switching, the
trend is likely to continue until natural gas prices climb above
$2.50/MMBtu, which is the generally acknowledged level at which
Powder River Basin coal becomes competitive with natural gas.
On Friday, the front-month NYMEX Henry Hub natural gas futures price
settled at $1.791/MMBtu.
December marked the seventh time in 2015 that natural gas-fired
generation surpassed coal-fired generation. Prior to 2015, coal had
always been dominant to natural gas for power generation.
Coal generation peaked at 37.9% in February 2015, while natural gas
generation peaked at 35.4% in August.
For the full year, coal edged out natural gas generation, 33.2% to
32.7%, respectively. In 2014, coal generation accounted for 38.6% of
power generation and natural gas 27.5%.
Coal had been as high as 49.6% of US generation in 2005, and natural
gas totaled 18.8% of generation the same year.
According to the EIA report, total US power generation came to 4.1
million TWh in 2015, down 0.2% from 2014. US power generation peaked
at 4.2 million TWh in 2007.
--Andrew Moore,
andrew.moore@platts.com
--Edited by Lisa Miller,
lisa.miller@platts.com
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