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US coal consumption flat in the near term

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World Coal,

ICF International has released its 1Q15 ICForecast Energy Outlook for the US power industry, predicting coal demand to remain flat through 2016 despite a large number of plant retirements expected following the implantation of the Mercury and Air Toxics Standards (MATS) rule.

In the longer term, ICF expects coal generation to remain constant through to 2020, despite the retirements, which ICF puts at 62 GW, as coal plants are run at higher capacity factors. Post-2020, coal will begin to lose its dominance of the generation mix, with gas dominant by 2030.

The Supreme Court is set to hear arguments related to MATS early this year, which may delay the implementation date. “However, EPA’s restart of the Cross-State Air Pollution Rule and the march towards a final Clean Power Plan will continue to put pressure on […] coal units, especially with natural gas prices to remain low in the near term,” ICF concluded.

ICF does expect investment in coal export facilities to grow over the next five year but notes that, with coal prices at five-year lows, US coal is currently uncompetitive on the global markets.

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