Dive Brief:
- U.S. coal consumption is forecast to rise 1.2% in 2014 but then fall 0.4% in 2015, according to the US Energy Information Administration.
- The 2014 increase in coal’s share of U.S. electricity generation to 39.4% from 2013’s 39.1% was caused by this year's jump in the price of natural gas.
- The 2015 drop in coal, according to the EIA, will be driven by EPA pollution regulations that make coal more expensive and an anticipated fall in the price of natural gas.
Dive Insight:
U.S. coal exports are expected to drop 18.3% from 2013 to 2014 because of slowing world demand growth and price competition from other nations’ coal. U.S. coal exports will fall in 2015 to the lowest level since 2010, according to EIA.
The 2015 power sector coal consumption drop will be driven by coal plant retirements brought on implementation of the Mercury and Air Toxics Standards and increasing competitiveness of natural gas in electricity generation, Platts reports.
In 2013, an estimated 5,700 megawatts of coal capacity were retired. Through September 2014, another 2,265 megawatts of coal capacity were retired and 895 megawatts more are scheduled for closure through the end of the year. In 2015, the EIA expects over 12,800 megawatts of capacity to be shuttered.
Longer term, the implementation of the Clean Power Plan is likely to significantly increase coal plant retirements after 2020.
