Coal Consumption At U.S. Power Producers Drops To Lowest Since 1983

U.S. electricity producers consumed the lowest amount of coal in the first half of 2018 since 1983, as natural gas is increasingly replacing coal-fired generation, according to calculations by Reuters market analyst John Kemp based on EIA data.

U.S. electricity producers consumed 298 million short tons of coal in the first half this year, down from 312 million short tons in the same period last year, according to the data based on the EIA’s Electric Power Monthly report. The power generation from coal in the first half of 2018 was the lowest for a first half since 1983, despite the U.S. Administration’s support to the coal industry.

Total electricity generation in the United States rose by 6 percent in the first half, but the electric power generated from coal went down by nearly 6 percent. At the same time, the generation of electricity from natural gas jumped by 17 percent, according to Reuters’ Kemp.

Coal-fired generating capacity across the United States continued to decline in the first half this year—to 246 GW as of end-June, down from 262 GW at the end of June last year and 273 GW at end-June 2016.

The share of coal in power generation has been declining for a couple of decades, but the cheap and abundant shale gas accelerated the decline of coal and the rise of natural gas as a source of electricity generation in the United States.

Most coal-fired plants are ageing and expensive to maintain, while making them compliant with emissions regulations also adds to costs to keep coal-fired generation capacity.

Last month, the EIA said that the 661 million short tons of coal consumed in the U.S. electric power sector in 2017 was the lowest amount of coal consumed since 1983. The electric power sector’s coal consumption last year was 36 percent—or 376 million short tons—lower than in 2008, when U.S. coal production reached its highest level, the EIA said.

By Tsvetana Paraskova for Oilprice.com

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