U.S. coal-fired generation fell to 42-year low in 2019

by Talk Business & Politics staff ([email protected]) 491 views 

Coal-fired electricity generation in the United States declined 16% to 966,000 gigawatt-hours in 2019 and was the lowest level since 1976, according to the U.S. Energy Information Administration (EIA). The decrease last year was the largest percentage decline and the second-largest in absolute terms at 240,000 gigawatt-hours.

Lower electricity demand contributed to less coal-fired generation in 2019, but increased output from natural gas-fired plants and wind turbines had the largest impact on the decline. Natural gas-fired generation rose 8% to a record of nearly 1.6 million gigawatt-hours. Electricity generation attributed to wind turbines rose 10% to a record of more than 300,000 gigawatt-hours.

U.S. coal-fired capacity reached a peak at 318 gigawatts in 2011 and has been declining since then because many plants retired or switched to other fuels and few new coal-fired plants started operating. U.S. coal-fired capacity was 229 gigawatts at the end of 2019.

The use rate for coal-fired plants also has declined. The plants were operating at as much as 67% of their capacity in 2010. By 2019, the use rate had fallen to 48%.

The use rates for coal-fired plants have fallen as the rate for other sources has increased. Natural gas combined-cycle turbine plants were operating at 57% of their capacity in 2019.

Coal-fired generation has fallen across the United States, but the Midwest and West have had fewer coal plant retirements and more stable operation. The Southeast, East North Central and West South Central account for a large amount of coal-fired capacity, and the regions had reductions of more than 18% in the capacity.

The increased availability of low-priced natural gas has had the largest impact on the decline in coal-fired generation. Natural gas combined-cycle turbine plants are efficient, burn low-cost natural gas and have reduced the amount of time a coal plant must be used to provide electricity to the grid. This has led to lower average coal plant use rates and the early retirements of some coal plants.

The average delivered prices for coal at power plants has been falling. Through 2015, the cost of coal was an average of $2.25 per million British thermal units, and by late 2019, it had fallen to less than $2 per million British thermal units.

While coal at U.S. power plants costs less than natural gas, for coal to be competitive, its delivered cost must be at least 30% lower to account for the differences in efficiency between a coal-fired plant and a natural gas-fired plant. The differences are greater among more efficient natural gas plants. Coal plants also must offset higher costs for emission control equipment.