June 19, 2014
/PRNewswire/ -- U.S. coal is poised to retain its majority share of the U.S. power market, based on winter 2014 consumption and inventories data just released by
*. U.S. coal consumption in winter 2013-2014 increased 17% from winter 2012-2013 to 74.1 million short tons per month. Similarly, coal-fired generation accounted for an estimated 44% of the total U.S. power stack, compared to 41% during the previous two winters.
Meanwhile, natural gas held steady at 24% of power generation compared to last winter and declined 2% compared to the winter prior, states
Back in the Black: Coal Makes Comeback
. The Bentek** report examines how record winter cold pushed U.S. electricity load to levels traditionally seen during the peak of summer and increased demand for all power-generating sources, particularly coal.
"Based on our analysis, coal is expected to remain a viable fuel source in the U.S. power sector, despite increased environmental regulation and competition from cheap and plentiful shale natural gas," said
, a Bentek analyst and the report's lead author. "This contrasts sharply with the past decade, during which coal's market share dropped by 12%."
A major driver of heightened winter coal consumption was natural gas prices. According to the report, prices hit
per million British thermal units (/MMBtu) several days this winter and averaged
/MMBtu at Henry Hub, the standard delivery point for the New York Mercantile Exchange (NYMEX) natural gas futures contract in the U.S. This compares with
/MMBtu during the previous winter and
/MMBtu in winter 2011-2012.
As a result, coal stockpiles at U.S. power facilities fell to the lowest levels since 2006. Stockpiles peaked in
, but plunged to 113 million short tons in March, compared to a five-year average of 177.9 million short tons. Reserves since have rebounded to 141.5 million (
Based on historical trends, stockpiles are unlikely to stretch beyond 136 million short tons by the end of June, or about 18 million short tons less than the five-year minimum. Coal stockpiles typically peak in mid- to late-June just prior to the height of the summer cooling season, and then experience a slight decline, followed by another build in the fall.