June 27, 2012 / 8:26 PM / 8 years ago

Natgas matches coal in share of US power generation in April

June 27 (Reuters) - Gas-fired power plants in April for the first time produced the same amount of generation as coal as decade-low gas prices prompted utilities to use the cheaper fuel to produce electricity, according to federal energy data Wednesday.

Since the U.S. Energy Information Administration (EIA) began compiling monthly statistics, natural gas and coal had the same share of total net power generation, 32 percent, during April, the agency said in a monthly update.

Historically, coal has been the fuel of choice for power generation because coal prices have been lower than natural gas prices for much of the last decade.

But sliding gas prices over the last year or so has made gas a more economic choice, allowing gas plants to increase their share of the nation’s generation.

EIA said the output of coal-fired units declined in all regions, while the output from natural gas-fired combined-cycle plants increased across the board.

Coal consumption fell almost 23 percent to 51.5 million tons in April 2012 from the same month in the prior year.

Natural gas consumption meanwhile increased to 744 million cubic feet, up almost 36 percent from the same month in the prior year.

With the switch to gas, coal stocks topped 203 million tons in April 2012, up almost 17 percent from the same month last year. That is just below the all-time record of 204 million tons in November of 2009.

The biggest decline in coal-fired generation was in the Northeast where output dropped 88 percent in April, cutting coal’s share of total generation in the region to less than 1 percent.

The Northeast consumed around 110,000 short tons of coal in April 2012 down from around 600,000 tons in April last year.

EIA said the biggest shifts from coal to gas were occurring in several regions, including the Southeast, Central, Mid-Atlantic and Northeast.

As for fuel prices, EIA said eastern coal from the Central Appalachian region in April remained more expensive than natural gas prices at both the Henry Hub and Transco Zone 6 in New York.

But western coal from the Powder River Basin was still cheaper than either eastern coal or gas, EIA said.

The Southeast, Florida, Mid-Atlantic and the Northeast regions use mostly bituminous coal, generally found in Appalachia. The West, Texas and Central regions use mostly subbituminous coal, primarily from the Powder River Basin in Wyoming and Montana. (Reporting By Scott DiSavino and Joe Silha in New York and Shruti Medha Chaturvedi in Bangalore; Editing by Bernard Orr)

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