NEW YORK Feb 12 Coal-fired power generation rose 8.9 percent last month above January 2012 on higher electricity demand and gas prices and less power generated from nuclear and renewable sources, energy data provider Genscape said on Tuesday.
Overall power demand started 2013 out 3.2 percent higher compared with January last year, driven by very cold weather in the fourth week of January.
Genscape monitors hundreds of power plants throughout the United States that show which plants are running and at what capacity.
Nuclear power output dropped last month 2 percent compared with January 2012 as DTE Energy Co's 1,085-megawatt Unit 2 at the Fermi nuclear power plant in Michigan did not run at full capacity, Genscape data shows.
An unplanned six-day outage at First Energy Corp's 1,240-megawatt Perry nuclear power plant in Ohio also added to lower nuclear output last month, Genscape said.
Power generated from renewable energy, primarily hydro and wind, was 1.32 percent lower last month compared with January 2012.
Natural gas-fired power generation has been increasingly encroaching on coal's market share in the last three years as ballooning gas production has lowered prices and coal has fallen out of environmental favor.
But once gas prices begin to rise, coal becomes more economical to burn.
Natural gas futures prices on the New York Mercantile Exchange rose to a high of $3.645 per million British thermal units (mmBtu) in January 2013, as cold weather created demand for gas-fired heating. Futures prices failed to rise beyond $3.12 per mmBtu in January 2012 due to mild weather.
The benchmark Henry Hub spot natural gas price in January 2012 averaged $2.70 per mmBtu, a 10-year low for that month, compared with $3.34 last month.
During the first 10 days of February, coal-fired power generation was up 11 percent compared with the same period last year, while gas lagged 18 percent, Steven Maestranzi, director of publications at Genscape said.
Unless gas prices sink well below $3 per million British thermal units, the power market will not see a steep shift back to burning gas in March and April as it did last year, a Genscape analyst said.
Gas futures prices dropped below $2 per mmBtu in April 2012 and coal burn hit a five-year low, as gas burn touched a five-year high.
"We're not going to see those same levels of coal and gas burn this year if Henry Hub prices remain where they are," Maestranzi said.
Henry Hub spot prices have remained in a $3-$4 per mmBtu range since the end of September 2012.