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Natural gas, renewables disrupt US power market

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World Coal,

Falling natural gas prices in the US could strand legacy investments in coal and nuclear power plants, according to a new report from SNL Energy.

“The nation’s power markets continue to experience transitional pains along the path toward an electricity sector increasingly built upon natural gas and renewables,” Andrew Gelbaugh and Jesse Gilbert, Senior Industry Analysts at SNL Energy, write in the report, ‘Generation investment in RTO markets – the challenge and opportunity’. As part of this transition, coal’s traditionally dominant role in the US power mix has been fundamentally disrupted by an influx of cheap gas, while in some areas a wave of renewables is starting to squeeze even natural gas generators.

“In some respects, depth of the nation’s fuel mix is expanding, but potential loss of even more baseload generation may threaten fuel diversity, exposing new challenges, including new natural gas constraints, the need to balance highly variable renewables and reliability issues as large generators retire,” conclude the authors.

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