EIA forecasts coal to remain king of American electric power generation

first_imgThe Energy Information Administration (EIA) forecasts coal to remain the dominant fuel for power generation until 2035 despite projected strong increases in natural gas and renewable fuel use over the same period. EIA’s revised Annual Energy Outlook, released last week, shows coal’s share of the market dropping to 43% in 2035 from 45% in 2009, but remaining the largest fuel source as gas use is forecast to rise to 25% from 23%. Renewable fuels will rise to 14% of the electricity generation market from 11% last year due to federal subsidies and eventually benefiting from state incentives. Investments in new coal capacity decrease over the 25-year forecast period, said EIA.  Natural gas plays a larger role, said EIA, because new data suggests shale gas supplies are much larger (827 tcf) than was suspected by EIA just last year (353 tcf). Estimates of much larger reserves will hold wellhead prices under $6/MM Btu (2009 dollars) through the mid-point of the forecast period before rising to $6.8/MM Btu in 2035. Gas-fired capacity additions increase 135 GW between 2009 and 2035. Although EIA more than doubled its estimate of unconventional gas reserves, it cited low prices, environmental concerns about hydraulic fracturing and the brief productive periods for shale gas wells among factors creating considerable uncertainty about the ready availability of shale gas. In addition, “increases in recoverable shale gas resources embody many assumptions that might prove to be incorrect over the long term,” according to EIA.The outlook also analysed the sensitivity in power generation markets to various assumed requirements for environmental retrofits for coal plants. Its reference case estimates a 3% reduction in the US coal fleet, with the projected retirement of nine gigawatts of coal generating capacity.Some revisions of note from the early release of the report in December include the retirement of the Oyster Creek nuclear plant by the end of 2019, wind capacity additions of 7 GW rather than 10 GW and updated natural gas reserve reporting.last_img read more