By Editors of Power Engineering
A new report by the U.S. Energy Information Administration predicts coal may surpass natural gas as the top electricity generation source this winter.
Though coal’s percentage of generation has declined for several months, the new forecast from EAI is for coal’s share to grow slowly in December, January and February compared to the same time last year. At the same time, the share of generation from natural gas may expect year-over-year declines.
The EIA forecast indicates the shift will be caused by expected cooler temperatures and market conditions.
During periods when available generation capacity exceeds electricity load, selection of which capacity to run often reflects relative operating costs, which largely reflect generators' fueling cost.
Currently, natural gas spot prices have risen over the last few weeks. Currently, the generation cost of natural gas averaged $21.30 MWh in August, which was nearly identical to the cost of coal.
Natural gas generation costs are expected to peak at nearly $31 per MWh in February, nearly 40 percent higher than coal.