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Coal-fired electricity generation remains stable

Published by
World Coal,

From 2006 to 2015, annual average heat rates of natural gas-fired electricity generators decreased 7% as heat rates of coal-fired electricity generators remained stable, increasing only 1%. Heat rates are calculated based on the amount of energy (measured in British thermal units) reported to EIA that was used to generate a unit of electricity. Lower heat rates indicate more efficient generation, because less fuel is needed per kilowatt-hour.

In 2006, the heat rate for all natural gas-fired generation averaged 8471 British thermal units per kilowatthour (Btu/kWh), about 18% lower than the average heat rate of 10 351 Btu/kWh for coal-fired generation. With stable coal-fired heat rates and declining natural gas-fired heat rates since that time, the average heat rate for natural gas-fired generation was about 25% lower than the average heat rate for coal-fired generation in 2015, based on the latest available annual data.

The small rise in the average operating heat rate for coal-fired generation may be attributed to emissions controls. Emissions-control equipment was installed on almost 205 GW of coal capacity from 2006 to 2015, or about 73% of the coal-fired generator fleet that was operating in 2016. These emissions-control measures often require more on-site usage of electricity, which involves consuming fuel but not necessarily producing electricity output.

Emissions-control investments were also made at about 37.5 GW of natural gas-fired generators, or about 9% of the natural gas fleet. However, relative to the effects on coal-fired generation, these investments have not been a significant influence on average operating efficiency trends for natural gas-fired generation.

Changes in usage patterns of coal and natural gas plants could affect their heat rates. Plants that are cycled on and off more frequently – as opposed to being operated more continuously – may consume more fuel to produce electricity, especially during ramping periods (times of increasing demand for electricity).

The rise in coal generators’ heat rates – likely attributable to increased onsite electricity use as a result of operational changes and emissions controls –was partially offset by the net effects of adding 19.5 GW of more-efficient new coal generating capacity while retiring 43.1 GW of relatively less-efficient coal capacity. Coal units installed between 2006 and 2015 had a weighted-average design heat rate of 9665 Btu/kWh, compared with the coal units that retired over this period, which had a weighted average design heat rate of 10 343 Btu/kWh.

One main factor in the improvement of the natural gas fleet’s heat rate is changes in the types of natural gas-fired electricity generators. Unlike coal, natural gas has two distinct types of electricity-generating technologies: combined cycle and simple cycle. Combined-cycle systems are significantly more efficient. The capacity of natural gas-fired units added since 2006 has been, on average, more efficient than the existing fleet, and the natural gas-fired capacity retired since 2006 has been, on average, less efficient. Almost 58 GW of combined-cycle capacity, with a weighted-average design heat rate of 7029 Btu/kWh, was added between 2006 and 2015. Nearly 34 GW of natural gas capacity, with a weighted average design heat rate of 11 218 Btu/kWh, retired during that period.

Over time, as more combined-cycle units have been installed, they have made up a larger portion of the natural gas generator fleet and accounted for a larger share of natural gas-fired generation. In 2015, natural gas-fired combined-cycle technology operated at an average heat rate of 7340 Btu/kWh. In contrast, simple-cycle natural gas-fired generators, which encompass several distinct technology types (gas turbines, internal combustion engines, and steam turbines), operated at a consumption-weighted average heat rate of 9788 Btu/kWh. Combined-cycle systems accounted for 75% of total natural gas-fired generation in 2006. By 2015, this share had increased to 85%. The increased use of the more efficient technology resulted in a lower overall average operating heat rate for natural gas-fired units.

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