Monday, July 1, 2013

In 2013 Coal is Winning The War On Coal: Coal Generation Jumps 13% As Natural Gas Power Falls 10%

The so-called war on coal remains hard to find in the 2013 power production numbers. The first 4 months of 2013 were good times for coal-fired powered plants, with a 13.6% national jump compared to 2012

A major fact of electricity generation markets is that coal and gas are battling it out for market share. And until November of 2012, when gas prices moved substantially above $3 for a thousand cubic feet, gas was winning most of its battles with coal.  Indeed, coal's generation market share fell to 37% in 2012, because it lost so much ground to natural gas whose electricity generation market share went above 30%.

But the higher gas prices that took hold from November 2012 to April 2013 allowed coal to come roaring back at the expense of natural gas power plants. In the first 4 months of 2013, higher gas prices that pushed beyond $4 for a thousand cubic feet led to a sharp fall in gas generation and more coal electricity. Denying that coal displaces gas in power markets, when gas prices rise, is to deny a key reality of today's power markets. Indeed, through April, 2013, natural gas-fired electricity generation is down 10% across America.

Today the biggest choice in power markets is coal or natural gas.  These two fuels provide more than 65% of America's electricity each and every day, but the share between the two can vary considerably.

1 comment:

  1. Duh. Market incentives win every time. Unless a carbon tax is implemented or the so-called shale gas revolution gets past the situation of barely being able to replace wells as they deplete, unfortunately, coal is the future.