Reports related to this article:
Plant(s): View 1 related plant in PECWeb
Released June 07, 2023 | SUGAR LAND
en
Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--U.S. coal-fired power generation is on the decline as aging plants struggle to compete with better-performing gas-powered facilities, federal data show.
Data from the U.S. Energy Information Administration, the statistical arm of the Energy Department, finds that coal-fired electric power capacity is down 37% from 2005 levels.
While momentum from the so-called energy transition--the collective effort to pivot away from fossil fuels--is making headlines in the industry press, the EIA suggests the decline in coal is largely due to the efficiency of natural gas.
"Recently, coal plants have struggled to effectively compete in competitive U.S. power markets against newer, more efficient, natural gas-fired, combined-cycle power plants," the EIA stated.
The United States is abundant in natural gas. The latest drilling productivity report from the EIA shows natural gas production from just the seven primary inland shale basins should reach 97.2 billion cubic feet per day (Bcf/d) in June, with about 35% of that coming from the Utica and Marcellus basins spread out in West Virginia and surrounding states.
Even more is coming out of the Gulf of Mexico, and gas production is about 6% higher than year-ago levels. Reflecting on its share in the power sector, EIA expects total U.S. natural gas used to power the grid will approach 40 Bcf/d this summer, the second highest level on record.
"High natural gas-fired electric power generation this summer is driven by a decline in coal-fired electricity generation, relatively low natural gas prices, and more overall electricity generation due to warmer-than-normal temperatures in our forecast," EIA stated.
Unlike natural gas, coal production is on the decline. EIA data suggests coal production declines by 3% from year-ago levels and another 15% by 2024. Ongoing retirements of aging plants, a steep drop in natural gas prices from year-ago levels and more renewable power generation are behind the drop in coal production.
Meanwhile, about 6%, or some 11 gigawatts (GW) of power, of coal-fired power generation is set to retire this year. About 75% of that is expected to go offline before July.
Among the largest to retire this year is the Homer City station in Pennsylvania, with a 1.8-GW nameplate capacity. The facility opened in 1969 but has been failing to make its case for utilities since the shale boom.
"Driven by the ramp up of drilling and fracking to produce natural gas from the Marcellus and Utica shale formations in the region, many new natural gas-fired power plants were built in Pennsylvania," EIA stated.
With more gas on the grid, Homer City was working only at intermittent levels and is now on pace to retire. Subscribers to Industrial Info's Global Market Intelligence (GMI) Power Plant Database can click here for a detailed plant profile.
Elsewhere, while the energy transition has been somewhat slow in the U.S. economy--offshore wind, for example, is still in the nascent stage--renewables are catching up. Data show the amount of natural gas on the grid declines by 2% next year as more sources of renewable energy come online.
Demand in the power sector is on pace to increase in response to warming trends. Hot, dry weather arrived much earlier than in year's past. The central Plains are in a deep drought and fire warnings covered half of Pennsylvania and Michigan as of Tuesday.
The government expects the number of cooling-degree days--a metric examining how much households will turn the thermostat lower--will be 8% higher than year-ago levels in 2023. Coal will be much less important in the move to address that growth in demand.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
Data from the U.S. Energy Information Administration, the statistical arm of the Energy Department, finds that coal-fired electric power capacity is down 37% from 2005 levels.
"Recently, coal plants have struggled to effectively compete in competitive U.S. power markets against newer, more efficient, natural gas-fired, combined-cycle power plants," the EIA stated.
The United States is abundant in natural gas. The latest drilling productivity report from the EIA shows natural gas production from just the seven primary inland shale basins should reach 97.2 billion cubic feet per day (Bcf/d) in June, with about 35% of that coming from the Utica and Marcellus basins spread out in West Virginia and surrounding states.
Even more is coming out of the Gulf of Mexico, and gas production is about 6% higher than year-ago levels. Reflecting on its share in the power sector, EIA expects total U.S. natural gas used to power the grid will approach 40 Bcf/d this summer, the second highest level on record.
"High natural gas-fired electric power generation this summer is driven by a decline in coal-fired electricity generation, relatively low natural gas prices, and more overall electricity generation due to warmer-than-normal temperatures in our forecast," EIA stated.
Unlike natural gas, coal production is on the decline. EIA data suggests coal production declines by 3% from year-ago levels and another 15% by 2024. Ongoing retirements of aging plants, a steep drop in natural gas prices from year-ago levels and more renewable power generation are behind the drop in coal production.
Meanwhile, about 6%, or some 11 gigawatts (GW) of power, of coal-fired power generation is set to retire this year. About 75% of that is expected to go offline before July.
Among the largest to retire this year is the Homer City station in Pennsylvania, with a 1.8-GW nameplate capacity. The facility opened in 1969 but has been failing to make its case for utilities since the shale boom.
"Driven by the ramp up of drilling and fracking to produce natural gas from the Marcellus and Utica shale formations in the region, many new natural gas-fired power plants were built in Pennsylvania," EIA stated.
With more gas on the grid, Homer City was working only at intermittent levels and is now on pace to retire. Subscribers to Industrial Info's Global Market Intelligence (GMI) Power Plant Database can click here for a detailed plant profile.
Elsewhere, while the energy transition has been somewhat slow in the U.S. economy--offshore wind, for example, is still in the nascent stage--renewables are catching up. Data show the amount of natural gas on the grid declines by 2% next year as more sources of renewable energy come online.
Demand in the power sector is on pace to increase in response to warming trends. Hot, dry weather arrived much earlier than in year's past. The central Plains are in a deep drought and fire warnings covered half of Pennsylvania and Michigan as of Tuesday.
The government expects the number of cooling-degree days--a metric examining how much households will turn the thermostat lower--will be 8% higher than year-ago levels in 2023. Coal will be much less important in the move to address that growth in demand.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
