Natural gas-fired generation is expected to surpass coal production in the US this year.
That’s the Energy Information Administration’s (EIA) forecast as part of its Short Term Energy Outlook report.
It states gas initially exceeded coal generation on a monthly-basis in April last year but this year will be the first time it will surpass it on an annual basis.
The production shares for the two energy sources were “nearly identical” in 2015, each providing around one third of all electricity generation.
The report adds: “The recent decline in the generation share of coal and the concurrent rise in the share of natural gas was mainly a market-driven response to lower natural gas prices that have made natural gas generation more economically attractive.
“Between 2000 and 2008, coal was significantly less expensive than natural gas and coal supplied about 50% of total US generation. However, beginning in 2009, the gap between coal and natural gas prices narrowed, as large amounts of natural gas produced from shale formations changed the balance between supply and demand in US natural gas markets.”
Coal’s generation share has also been reduced by the growing market share of renewables other than hydroelectric power, especially wind and solar.
Unlike the growth of natural gas-fired production, “which has largely been market-driven”, increased use of non-hydro renewables has been driven by a combination of state and federal policies, the EIA states.