Tuesday, April 16, 2013

A Tale Of Coal In 2 Nations: China Adds 50,000 Megawatts of Coal But USA Retires 9,000 Megawatts

For coal around the world it is the best of times, with the notable exception of the USA, where coal consumption and production hit lowest levels for many years during 2012.  Declines in coal consumption and production has led some to declare that there is a war on coal in the USA, though coal mining employment in the US has risen over the last 10 years.

Yet, there is no war on coal in China. That's for sure.  Unlike in the US, shale gas is not now a competitive threat to coal in China, though that might change over the next 10 years.  And unlike in the USA, the Chinese government pours money into a massive coal-fired power plant building boom that continues year after year.

China is coal-powered, getting about 70% of its total energy from coal, and its surging coal use continues.  China built 50,000 megawatts of coal generation during 2012 or about one-sixth of the US coal fleet.

Meanwhile, in the USA, 9,000 megawatts of coal generation retired in 2012 out of 316,000.
http://www.reuters.com/article/2013/01/04/utilities-coal-usa-idUSL1E9C352P20130104.  While coal provides currently about 40% of America's electricity, coal provides about 20% of our total energy.  Coal provides 3.5 times of China's total energy as it does in the USA.

Moreover, in the USA  the pace of coal retirements is quickening.  Considerably more coal generation will retire in the next 3 years, with estimates ranging from about 40,000 to 100,000 megawatts.  In short, the USA could retire up to a third of its coal generation by 2016.

What explains China's continuing rush to coal but America's declining coal-fired capacity?  America has both natural gas at $4 that makes gas a powerful market competitor with coal and air regulations that protect public health.  China has neither!

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