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U.S. Coal Generation Drops 19 Percent In One Year, Leaving Coal With 36 Percent Share Of Electricity

By Stephen Lacey on May 14, 2012 at 9:27 am

"U.S. Coal Generation Drops 19 Percent In One Year, Leaving Coal With 36 Percent Share Of Electricity"

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Power generation from coal is falling quickly. According to new figures from the U.S. Energy Information Administration, coal made up 36 percent of U.S. electricity in the first quarter of 2012 — down from 44.6 percent in the first quarter of 2011.

That stunning drop, which represented almost a 20 percent decline in coal generation over the last year, was primarily due to low natural gas prices. As EIA explains, natural gas generation will climb steadily this year, while coal will see a double-digit drop by the end of 2012:

Natural‐gas‐fired generation continues to expand its share of total generation at the expense of coal‐fired generation. During the first quarter of 2012, natural gas accounted for 28.7 percent of total generation compared with 20.7 percent during the same quarter last year. In contrast, coal’s share of total generation declined from 44.6 percent to 36.0 percent over the same period.

Prices for natural gas delivered to the electric power industry fell by 7.5 percent in 2011, which contributed to a significant increase in the share of natural‐gas‐fired generation. EIA expects this trend to continue in 2012, with electric power sector coal consumption falling by 14 percent. Natural gas in the electric power sector grows by almost 21 percent in 2012, primarily driven by the increasing relative cost advantages of natural gas over coal for power generation in some regions.

EIA also projects that coal production at mines will fall by more than 10 percent this year. However, with prices falling due to an increase in secondary inventories, the agency predicts that domestic consumption may rise by just over 1 percent next year.

The U.S. coal industry if facing major headwinds. The current drop in generation is mostly due to competition from natural gas. But there are other factors that will assist in pushing coal out of the electricity mix: An aging fleet of plants, cost-competitive renewables, new clean air regulations, and a strong anti-coal movement are working together to reduce the attractiveness of coal. Since 2010, plant operators have announced 106 retirements of coal facilities — representing 13 percent of the U.S. fleet, according to the Sierra Club.

The continued decline in domestic coal generation is good news for reducing greenhouse gas emissions. Carbon dioxide emissions from the fossil fuel sector are expected to decline by almost 3 percent this year — continuing the 1.9 percent decrease seen in 2011. Emissions from natural gas will rise by 5.5 percent, while emissions from coal will fall by almost 12 percent.

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23 Responses to U.S. Coal Generation Drops 19 Percent In One Year, Leaving Coal With 36 Percent Share Of Electricity

  1. Mike Roddy says:

    Kinda good news, but let’s start celebrating after there’s a carbon tax, and coal and gas are both mothballed.

    • Sasparilla says:

      Good point Mike.

      It’s great to see this with Coal, but this is all about natural gas taking share from Coal because natural gas is so (temporarily) cheap – that will change over time.

      Coal will be dropping until natural gas pops back up again (a year or two down the road?) and then coal will be growing again cause its cheaper and we have “so much”….

      We need climate change based regulation (carbon price) to slit carbon’s throat, everything else is more of a mirage just waiting for the GOP to take power (and they will eventually) and wipe out the EPA or whatever is in the way of pulling more coal out of the ground and selling it.

      • Mary says:

        Also well said and was thinking similarly.

      • RobS says:

        That would be true but for one point, this “temporary” price effect is not just seeing coal plants idled but decommissioned. Over 110 in 2 years with dozens more scheduled. So even if the economics reverses where exactly do you propose they will turn this coal into power? Even if they had the will to build new plants that process would take ~6-8 years by which time renewables will have fallen even further in cost, seeing as they only take 1-2 years to commission new coal plants aren’t competing with today’s energy economics they’re competing with the energy economics in 6 years time. That’s a big risk to take and clearly too big a risk judging from the dearth of people seeking o construct new coal plants.

  2. Deb Carroll says:

    Double-edged sword – great for the environment, but what about the people left unemployed and living in environments that have been trashed by the mining companies? There needs to be something put in place to help them learn something new, and to clean up the mess coal mining companies will leave behind.

    • Mary says:

      Well said. I was thinking the same thing.

    • ks says:

      Very well said.

      I’m from southern WV and most of my family are coal miners. The environmental devastation that I see whenever I go home for a visit makes me sick, but at the same time, people need jobs. It also doesn’t help that the state government, both parties, is more or less owned by the coal companies and there certainly isn’t going to be any help on either the environment *or* jobs from that corner.

    • Anne van der Bom says:

      OTOH, they actively supported the coal industry. They witnessed the destruction of their habitat first hand, yet did not stop it. They are primarily victims of their own own short sightedness.

      • Ivan Karamazov says:

        Get off your high horse. Appalachia has historical unemployment akin to Indian reservations. There are no other jobs. And no one would ever dig coal for a living if they had any other choice. It’s dangerous, brutal work that can kill you fast and slow at the same time.

  3. pete best says:

    Its easy enough when you have outsourced your manufacturing to China

  4. nick says:

    Wondering if there’s another mixed blessing here. As we continue to drop coal burning, will we lose the cooling effect from sulphate aerosols? If well leakage at NG sites remains AOA 2% are we not still at parity with coal as a GHG emitter? Any thoughts out there?

  5. Tom King says:

    Its important to realize how this changes the presentation.

    Old Presentation: We need to change our energy source. (hard to sell)

    New Presentation: We’re changing anyway, so why not choose the renewable option? (easier to sell)

  6. Mitch Beales says:

    Bbbbut…if we stop burning coal the grid will go dark!

  7. Matt Leonard says:

    I think this is an example of the climate movement needing to step back and remember the big picture. The goal is not (just) to move us off of coal because it’s just bad (which it is). The goal is to dramatically reduce greenhouse gas emissions, and move us towards a clean-energy economy.

    While great that coal use is down, emissions aren’t. And rather than efficiency or renewables taking up that space, natural gas is expanding. While we know that fracking is very destructive on many levels, a growing body of research points to gas being on par with coal in terms of its climate change impacts too.

    • Matt Leonard says:

      I should clarify – while projections are that emissions are slightly down, much of that is simply attributed to a decline in economic activity, and the short-term market prices for coal and gas. Projections are for coal use to slightly expand next year (as we see some price volatility in relation to gas).

      Nonetheless, the retiring of power plants is the bigger news here – that takes infrastructure offline, and is a better indicator of longer-term moves away from coal use (irrespective of fuel prices)

      • RobS says:

        Retiring coal plants certainly is the bigger story, until the EIA can outline where exactly they think the increased coal generation is going to occur their prediction remains ludicrous. Considering the coal we are not presently burning was previously burnt in the 110 coal plants shuttered in the last 2 years as I see it the only way or any meaningful increase to occur us for new capacity to be brought online, a process that takes the better part of a decade and faces strong economic, environmental and public opinion headwinds.

    • richard schumacher says:

      Quite so. We should be building new non-fossil sources, including nuclear, wind, and Solar, as quickly as possible.

  8. Sue says:

    You think there is good news on the future of renewable fuels and reducing GHG emissions because WE are burning less coal?
    guess again.
    google “US coal exports 2011″

  9. Yes, Sue, and google “US coal exports Spokane railroad”. Massive amounts of US coal are making their way by train to West coast port and more is coming. Destination: China. Consequence: negative impacts for towns along the train routes as well as for port town. The Burlington Northern Railroad is another of Warren Buffett’s monopoly pieces and has already endangered our sole source aquifer here in the Spokane, Washington area. Now this.

  10. Spec says:

    This is great news for electric cars since many people inaccurately deride them as ‘coal cars’. Even when powered by coal, they are better than gas guzzling conventional cars.

  11. Buzz B says:

    This is kind of staggering. I was amazed teaching this past Spring that coal had fallen to 44% of U.S. electricity generation, when it had been around 50% for years. Now down to 36%! That’s great news.

    Heard the COO of Appalachian Power at a lunch speech last fall say that the company will NEVER build another coal-fired plant. Natural gas is a big part of it, but so were the regulations that he knew were coming. This administration deserves some credit for the decline in coal use. Not easy to do without a carbon price.

    One of my colleagues is betting that the Dominion plant in Wise, Va may be the last coal plant built in this country, so long as the new NSPS stds hold.

    Now if we could only properly regulate natural gas to eliminate fugitive emssions, we can claim some real progress in the fight against climate change.

  12. Piyush says:

    This may actually increase emissions because now the coal that is not used in US will be shipped to coal-hungry countries [China for example, to create goods for consumption in the US for the economic "growth" to continue] and the shipping will increase emissions. So net emissions are likely to increase. Without regulation to keep fossil fuels in the ground, there will not be real progress, there will be “feel good” progress.