EIA: Coal burn down to level not seen since early 1980s

Dive Brief:

  • United States' coal use continues to decline and in the first half of this year saw a more than 14% drop relative to 2014, due to lower gas prices and the retirement of older, inefficient units.
  • According to SNL, that puts coal burn on par with use in the early 1980s, though it still produces the largest share of utilities' power needs.
  • The decline in coal use comes as EIA is also predicting natural gas production across all major shale regions to decrease for the first time next month.

Dive Insight:

Coal is still producing the bulk of utilities' power, but new data from the EIA shows the country's reliance on fossil fuels continues to decline. Generation from coal declined 14.4% in the first half of 2015, relative to last year, with the largest declines in the mid-Atlantic region where generation was down 21%.

While utilities have been shuttering older facilities and relying more on natural gas, as commodity prices remain low, EIA also expects next month to see the first decline in production from major shale regions. Production from seven regions reached a high in May at 45.6 billion cubic feet/day (Bcf/d) but is expected to decline to 44.9 Bcf/d in September.

"In each region, production from new wells is not large enough to offset production declines from existing, legacy wells," EIA said. Because of substantial drops in rig counts since the fourth quarter of 2014 in each shale regions, and growing declines in production from legacy wells, "productivity increases are less able to completely offset lower rig counts and legacy-well declines," the agency said.

At the same time, EIA said in its Electric Monthly Update that solar generation from utility-scale facilities hit a monthly record high of 2,765 GWh in June 2015 — a year-over-year increase of 35.8% relative to June 2014.

EIA said the primary growth driver was the continued expansion of solar photovoltaic capacity, which increased by 47.5% from June 2014 to June 2015. "Over that same period, solar thermal capacity increased by 18.1%. Solar electricity output in June is a good indicator of the recent growth of the solar industry because June has the highest monthly average of sunlight per day," EIA said.

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Filed Under: Generation
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