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First time ever: Gas overtakes coal in US power mix

First time ever: Gas overtakes coal in US power mix

he Robert W. Scherer power plant, in Georgia, is the U.S. largest coal-fired power plant (Image from archives).

Electricity generated from natural gas in the U.S. surpassed that generated from coal for the first time ever in April, highlighting the increasing pressure a booming shale gas industry is putting on the country’s mining sector.

According to figures from the US Energy Information Administration (EIA), cheap natural gas and falling oil prices led America to generate 31% of its power needs from gas, versus 30% from coal.

While the difference is not much, the weight change in the power mix marks the first month in U.S. history that gas-fired electricity generation overtakes coal-fired generation.

“To some degree, the latest statistics reflect the low-demand season with both fuels showing a big drop from the winter months,” researchers from SNL Energy said in a note earlier this month.

First time ever: Gas overtakes coal in US power mix

Already battered by increasingly onerous regulations on pollution from power generation, the U.S. coal industry is not in a position to weather the mounting “gas storm,” and fresh data from the EIA seems to confirm this fear.

The country’s total production of the fossil fuel is forecast to fall by 7.5% this year as the shift away from coal gathers pace, EIA figures show. U.S. coal capacity fell by roughly 3.3GW during 2014, and the energy agency expects it to drop even further by about 12.9GW this year, while wind power capacity goes up by 9.8GW and gas by 4.3GW.

The same data, however, reveals that coal-fired generation should recover later in the year, as natural gas prices rise and coal-fired plants return from spring maintenance schedules. Once this happens, the EIA predicts the fuel will generate 35.6% of U.S. electricity over the year, compared to 30.9% from natural gas.