Coal demand, exports to be flat through 2050
by March 30, 2018 12:25 pm 218 views
U.S. coal demand and exports are expected to remain flat through 2050, even as coal-fired plants are removed from operation, according to the U.S. Energy Information Administration. Coal demand and exports are expected to be about 750 million short tons per year over the next three decades, down from nearly 1.2 million tons in 2008.
Coal demand in the power sector is impacted by natural gas price changes, the EIA has cases or projections that show how the changes would affect demand. The reference case is based on existing laws and regulations, and policy changes could affect coal use.
Coal disposition, or demand and exports of coal, is largely impacted by changes in the electric power sector, in which 82% of domestic coal was used in 2017, according to the EIA. Coal use in the power sector depends on the capacity of coal-fired plants and how much the plants are used. Other electricity-generating fuels, especially natural gas, affect decisions to retire coal-fired capacity and its use.
In late 2017, coal-fired generation capacity was 260 gigawatts, down from 310 gigawatts in 2011. Over the next three years, at least 25 gigawatts of coal-fired capacity will be removed from operation. In EIA’s reference case, coal-fired capacity is expected to decrease 65 gigawatts, between 2018 and 2030. No retirements are expected from 2030 through 2050.
Between 2017 and 2030, no new coal-fired power generation capacity is included in the reference case as coal-fired electricity generation is expected to be flat, plant retirements decrease and the use of existing coal capacity rises from 56% to nearly 70% — a rate similar to the early 2000s.
In 2016, natural gas surpassed coal as the leading source of U.S. electricity generation. The EIA’s reference case shows coal’s share of total U.S. electricity generation will fall to 22% in 2050, from 31% in 2017, as natural gas and renewable energy increase their generation shares.
On a heat-content basis, natural gas costs $3.47 per million British thermal units, compared to coal’s $2.15 per million British thermal units. However, natural gas plants are typically more efficient, and the cost to generate electricity is close to that of coal-fired plants. In 2017, generating costs were $26 per megawatt-hour for natural gas and $22 per megawatt-hour for coal.
Other components of coal disposition have less to do with changes in the price of natural gas. In 2017, U.S. net exports of coal were 89 million short tons, or 11% of the share of coal disposition. The remaining 7% of coal disposition (53 million short tons) is comprised of commercial, institutional and industrial uses. Metallurgical coal accounts for about one-third of non-power domestic coal use and a half of coal exports. U.S. coal disposition is nearly the same as U.S. coal production after subtracting the low levels of coal imports from coal exports.