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Coal-Generated Power Plummets Due To Cheap Natural Gas

According to the Energy Information Agency's (EIA) May outlook, expect coal-generated electric power to drop a full 15% for 2012 while natural gas generated power increases by 24%. Coal dropped from 45% to 36% as the source of U.S. power generation.
May 23, 2012, 1pm PDT | Irvin Dawid
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In addition to the cheapest natural gas prices in a decade, Stephen Lacey credits environmentalists' successful efforts to halt new coal plants from opening and to shutter existing ones, and additional challenges facing America's oldest fossil fuel energy industry.

"The U.S. coal industry is facing major headwinds. The current drop in generation is mostly due to competition from natural gas. But there are other factors that will assist in pushing coal out of the electricity mix: An aging fleet of plants, cost-competitive renewables, new clean air regulations, and a strong anti-coal movement are working together to reduce the attractiveness of coal.

"Since 2010, plant operators have announced 106 retirements of coal facilities - representing 13 percent of the U.S. fleet, according to the Sierra Club."

On Feb. 29, Lacey reported on "Nine More Dirty, Aging Coal Plants Set to Close": "So what's going to happen to the lights when all that coal gets phased out? According to a group of forward-thinking power providers, there's already enough unused combined cycle natural gas capacity installed to make up for over 100 GW of closures."

EIA noted a turn-around of sorts in 2013, however, forecasting that "electricity generation from coal will increase by about 4 percent as projected coal prices fall slightly while natural gas prices increase, allowing coal to regain some of its power generation share."

Thanks to Paul Scott

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