EIA: Use of coal-fired power in the Southeast declining

Source:U.S. Energy Information Administration

Source: U.S. Energy Information Administration, Electricity Monthly Update Note: Other refers to electricity generated from the non-biogenic portion of municipal solid waste, other non-renewable waste fuels, hydroelectric pumped storage, other energy storage, and other sources.

The region with the largest shift between coal and natural gas in terms of both the overall generation levels and the relative fuel mix has been in the Southeast. Lower natural gas prices, a concentration of highly efficient natural gas-fired generators, and the high cost of shipping coal from production regions have all contributed to this shift.

The Southeast includes three large, vertically integrated utility systems as well as a patchwork of smaller service territories. While these systems do not dispatch, or run, generation units through auctions like regional transmission organizations, they still generally choose which units to run based on the fuel costs associated with operating them.

Electric units that are fired by all types of coal were backed down during the spring of 2012, when natural gas prices in the region were at their lowest point in a decade. Coal-fired generation rebounded modestly in 2013 as natural gas prices rose above their 2012 levels, but coal is still contributing less than 50% of regional generation this year, which is a dramatic shift from 2001-09.

 Source: U.S. Energy Information Administration, Electricity Monthly Update

Power plants in the Southeast are as much as 1,600 miles from cheap Powder River Basin coal and have traditionally used both that resource and Central Appalachian Basin coal that comes from mines in the East. The chart below shows the delivered cost of fuels for natural gas, bituminous coal (typically sourced from eastern mines), and subbituminous coal (which largely comes from mines in the West like the Powder River Basin).

 Source: U.S. Energy Information Administration, Electricity Monthly Update

Although they are volatile at times, natural gas prices as delivered to electric power plants in the Southeast have been hovering at or below $4 per million British thermal units (MMBtu) since 2011. Delivered coal prices, in contrast, have been holding steady or rising since 2003. Natural gas-fired units have been able to take advantage of lower prices, leading to the drop in coal-fired output in the region. The Southeast is also home to a concentration of highly efficient natural gas combined-cycle plants (see the red circle in the graph below), meaning that the region could take advantage of the lower natural gas prices to displace a large amount of coal-fired generation.

Source: U.S. Energy Information Administration, Annual Electric Generator Report Note: Tested heat rates are measures of operational efficiency of electric power generators under conditions similar to full load. Chart does not include outlier data points.

Principal contributor: M. Tyson Brown
U.S. Energy Information Administration, Electricity Monthly Update


Did You Like this Article? Get All the Energy Industry News Delivered to Your Inbox

Subscribe to an email newsletter today at no cost and receive the latest news and information.

 Subscribe Now


Logistics Risk Management in the Transformer Industry

Transformers often are shipped thousands of miles, involving multiple handoffs,and more than a do...

Secrets of Barco UniSee Mount Revealed

Last year Barco introduced UniSee, a revolutionary large-scale visualization platform designed to...

The Time is Right for Optimum Reliability: Capital-Intensive Industries and Asset Performance Management

Imagine a plant that is no longer at risk of a random shutdown. Imagine not worrying about losing...

Going Digital: The New Normal in Oil & Gas

In this whitepaper you will learn how Keystone Engineering, ONGC, and Saipem are using software t...

Latest PennEnergy Jobs

PennEnergy Oil & Gas Jobs