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US coal production and coal-fired electricity generation expected to rise

Published by , Editorial Assistant
World Coal,

According to the EIA, coal production in the US totalled 739 million short t in 2016, an 18% decline from 2015 and the lowest level of coal production since 1978. Because nearly all coal produced in the US is used to generate electricity, coal production and coal-fired electricity generation are closely connected.

In 2017 and 2018, as natural gas prices are expected to increase, coal is expected to regain some share of the electricity generation mix, and coal production is expected to increase slightly.

The past decline in coal production has not been uniform across the three major coal-producing regions in the US. Production declines in the Western region, which includes the Powder River Basin that spans parts of Wyoming and Montana, have been similar to the overall US production, falling 36% since 2008, nearly equal to the 37% decline nationally. Production declines in the Appalachian region have been more pronounced, falling by 53% since 2008. The Interior region, which includes the Illinois Basin, increased by 2% from 2008 to 2016.

Similarly, the expected increase in coal production through 2018 also varies across regions. Coal production is expected to increase most in the Western region, rising from 407 million short t in 2016 to 443 million short t in 2018. Forecast production levels in the Appalachian and Interior regions are relatively flat. Coal production in the Appalachian region, where production costs are relatively high, is expected to be 177 million short t in 2018, slightly lower than the 2016 level of 183 million short t. Interior coal production is expected to increase from 150 million short t in 2016 to 152 million short t in 2018.

In 2016, the electric power sector accounted for an estimated 92% of total US coal consumption. From 2008 to 2016, coal’s share of electricity generation decreased, and in 2016, natural gas-fired generation exceeded coal’s share of the US electricity mix on an annual basis for the first time. Largely because of an expected increase in the price of natural gas, the use of natural gas-fired generators is expected to decline slightly in 2017. However, new natural gas power plants are currently being built, and by 2018 the availability of these units may lead to increases in natural gas-fired generation.

Although the relative prices of coal and natural gas are important in determining fuel use, generation trends for these fuels are also affected by changes in generation from other sources, including wind, solar, and hydropower, as well as by total electricity demand, which can be significantly affected by both weather and economic factors.

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