February 1, 2016 / 6:47 PM / 2 years ago

Monthly coal use for U.S. power fell to 35-year low in November: EIA

Coal is excavated at the Jim Bridger Mine, owned by energy firm PacifiCorp and the Idaho Power Company, outside Point of the Rocks, Wyoming in this March 14, 2014 file photo. REUTERS/Jim Urquhart

(Reuters) - U.S power generation from coal fell to the lowest monthly level in 35 years in November 2015 as generators switched to cleaner and cheaper natural gas, according to federal data.

Gas overtook coal as the leading source of U.S. power for a fifth month in a row in November, according to the latest data available from the U.S. Energy Information Administration. The first month in history that gas overtook coal was April 2015.

With just one month of data missing in 2015, some analysts think power companies may have burned more gas than coal for the full year for the first time in history.

Coal has been the primary source of fuel for U.S. power plants for at least a century, but its use has been declining since peaking in 2007 and is expected to decline further as the federal government imposes rules to limit carbon emissions.

EIA said generators produced 101,866 thousand megawatt hours (MWh) of electricity with gas in November versus just 87,789 thousand MWh with coal, the lowest monthly level since May 1980 when monthly coal use was 84,884 thousand MWh.

Despite gains for gas usage over the past several months, coal was still the dominant fuel source for power for the first 11 months of 2015.

That’s because generators used a lot of coal last winter during January and February when the polar vortex was freezing much of the country and gas was trading its most expensive levels for the year - around $3 per million British thermal units.

Gas prices at the Henry Hub benchmark in Louisiana fell as low as $1.53 in December and averaged $2.61 for all of 2015, the lowest level since 1999, as drillers produce record amounts of the fuel especially from shale fields.

For the first 11 months of 2015, coal produced about 34 percent of the country’s power versus 33 percent for gas.

The next biggest sources of power production were nuclear, at 19 percent, and non-hydro renewables such as wind and solar at 7 percent, the EIA said.

Cheap gas has kept power prices low for the past few years, making it uneconomic for generators to upgrade their older coal plants to meet increasingly strict federal and state environmental rules.

Hence, U.S. power companies have already shut or converted over 15,000 megawatts of coal-fired plants in 2015, the most in any year, according to Thomson Reuters data.

Reporting by Scott DiSavino; Editing by Jonathan Oatis and Chizu Nomiyama

Our Standards:The Thomson Reuters Trust Principles.
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