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Tuesday, September 14, 2010

Coal appears to be losing its battle with natural gas

We've been following the battle between natural gas and coal for the principle fuel of U.S. electricity, most recently here. Further evidence is pointing to natural gas winning the fight. The switch from coal to natural gas "is occurring globally and is getting a push from regulators who want to limit emissions that contribute to climate change, haze and health problems such as respiratory illness," Rebecca Smith of The Wall Street Journal reports. "Though efforts in Congress to pass legislation attaching a price to carbon emissions appear stalled for now, utilities still anticipate eventual carbon restrictions."

"It's pretty clear that, whether it's caused by future carbon legislation or action by the EPA, the migration away from coal has begun," Constellation Energy Group Chief Executive Mayo Shattuck told Smith. Coal-burning facilities are expected to account for just 10 percent of total new U.S. capacity in 2013, down from 18 percent in 2009. "Gas, meanwhile, is expected to soar to 82% of new capacity in 2013 from 42% last year," Smith writes.

"Most big coal-burning utilities have invested billions of dollars to install pollution-control equipment on their largest coal-fired plants," Smith writes. "But they are replacing or idling smaller coal plants for which such expenditures can't be justified." Even some large coal-burning utilities who are looking to find cleaner ways to burn the fuel have suffered setbacks. "American Electric Power Co. failed in its bid, in July, to get Virginia customers to pay $54 million of the cost of creating an experimental carbon-capture-and-storage system at its Mountaineer coal-fired plant in West Virginia," Smith writes, noting Duke Energy has also been hurt by escalating costs at its state-of-the-art coal gasification plant in Indiana. (Read more)

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