US Coal Consumption To Hit Rock Bottom, Lowest Level In 39 Years
The US Energy Information Administration has published numbers this week which shows 2018 US coal consumption is expected to fall to 691 million short tons (MMst), its lowest level in 39 years.
The Energy Information Administration published a short ‘Today in Energy’ update on Tuesday highlighting its expectations for the US coal industry in 2018, revealing that total US coal consumption for 2018 is expected to fall to around the 691 MMst mark — a 4% decline on 2017 levels, 437 MMst (44%) down on 2007, and the lowest level since 1979.
The decline in US coal use is due primarily to changes in the country’s electric power sector, the nation’s largest consumer of coal. The US power sector accounted for 93% of total US coal consumption between 2007 and 2018 and, as such, the decline in coal consumption is due primarily to changes in the power sector, which has increased the pace of coal-fired power plant retirements and decreased capacity factors, or utilization, of coal plants as a result of increasing competition from natural gas and renewable energy.
Just how much coal has been retired in the United States of late? In 2007, coal-fired capacity in the United States totaled 313 gigawatts (GW) spread over 1,470 generators. At the end of 2017, the US power sector had retired 55 GW across 529 generators — and in the first nine months of 2018 alone, 11 GW was retired, and another 3 GW is expected to be retired by the time the year comes to a close (and a further 4 GW expected to be retired by the end of 2019).
The EIA highlights two main drivers for the slate of coal retirements, led in part by the price of coal relative to natural gas since natural gas prices have remained relatively steady since domestic natural gas production began to grow back in 2007. However, a second cause for the decline of coal is the role of environmental concerns, and in particular the growing role of renewable energy in the US energy sector. Add to this the impact of stricter environmental controls, and a decline in the coal industry was only natural.
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