By - Jim Vess

U.S. utility industry coal consumption set to fall to lowest level in 40 years in 2019

Energize Weekly, May 22, 2019

The U.S. power sector is forecast to consume about 555 million short tons of coal to produce electricity in 2019—the lowest amount since 1979, according to the federal Energy Information Administration (EIA).

Coal will still be the second-largest source of generation in 2019, providing 996 million megawatt-hours (MWh) of electricity—24 percent of the total. Natural gas-fired plants will be the largest electricity generator, providing 37 percent of the total, 1,505 million MWh.

About 16 gigawatts (GW) of coal-fired power units at 20 plants were retired in 2018, according to Bloomberg New Energy Finance (BNEF).

Announced retirements for 2019, which have already received regulatory approvals, total 5.8 GW, according to S&P Global Market Intelligence.

Coal-fired plant capacity has fallen by a third since 2010, and BNEF projects approximately another 10 GW closing by 2024.

Meanwhile, renewable energy generation continues to grow with utility-scale solar increasing 10 percent in 2019 and 17 percent in 2020, the EIA said. Wind generation will rise 12 percent in 2019 and 14 percent in 2020. Electricity generation for all renewable sources is projected to reach 20 percent of the total generation by 2020.

As coal-fired plants retire, coal stockpiles have also fallen. Coal stockpiles in February decreased to 98.7 million tons, the lowest amount in more than a decade, the EIA said.

“Coal plants generally stockpile much more coal than they consume in a month,” the EIA said. “Coal consumed by power plants follows the seasonal pattern in overall electricity generation, meaning coal consumption is typically highest in summer and winter months.”

As a result of the high winter and summer consumption, February and August tend to be the months with the lowest coal stocks at power plants.

The EIA also calculates how long these stocks would last—the so-called days of burn—if the power plants received no additional coal. In February 2019, U.S. coal power plants had, on average, about 90 days of burn.

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