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US coal-fired electricity generation on the rise in 2021

Published by
World Coal,


The US Energy Information Administration (EIA) is expecting 22% more US coal-fired generation in 2021 than in 2020, according to its latest short-term energy outlook (STEO).

The US electric power sector has been generating more electricity from coal-fired power plants this year as a result of significantly higher natural gas prices and relatively stable coal prices. This year, 2021, will yield the first year-over-year increase in coal generation in the US since 2014.

Coal and natural gas have been the two largest sources of electricity generation in the US. In many areas of the country, these two fuels compete to supply electricity based on their relative costs. US natural gas prices have been more volatile than coal prices, so the cost of natural gas often determines the relative share of generation provided by natural gas and coal.

Because natural gas-fired power plants convert fuel to electricity more efficiently than coal-fired plants, natural gas-fired generation can have an economic advantage even if natural gas prices are slightly higher than coal prices. Between 2015 and 2020, the cost of natural gas delivered to electric generators remained relatively low and stable. This year, however, natural gas prices have been much higher than in recent years. The year-to-date delivered cost of natural gas to US power plants has averaged US$4.93 per million British thermal units (Btu), more than double last year’s price.

The overall decline in US electricity demand in 2020 and record-low natural gas prices led coal plants to significantly reduce the percentage of time that they generated power. In 2020, the utilisation rate (known as the capacity factor) of US coal-fired generators averaged 40%. Before 2010, coal capacity factors routinely averaged 70% or more. This year’s higher natural gas prices have increased the average coal capacity factor to about 51%, which is almost the 2018 average.

Although rising natural gas prices have resulted in more US coal-fired generation than last year, this increase in coal generation will most likely not continue. The electric power sector has retired about 30% of its generating capacity at coal plants since 2010, and no new coal-fired capacity has come online in the US since 2013. In addition, coal stocks at US power plants are relatively low, and production at operating coal mines has not been increasing as rapidly as the recent increase in coal demand. For 2022, we forecast that US coal-fired generation will decline about 5% in response to continuing retirements of generating capacity at coal power plants and slightly lower natural gas prices.

Read the article online at: https://www.worldcoal.com/power/19102021/us-coal-fired-electricity-generation-on-the-rise-in-2021/

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