Coal-fired power to fight back in 2013

THERE’S good news for the US coal industry from the federal Energy Information Administration, which predicts that coal-fired electricity generation will increase by 9% next year as natural gas loses its price advantage.
Coal-fired power to fight back in 2013 Coal-fired power to fight back in 2013 Coal-fired power to fight back in 2013 Coal-fired power to fight back in 2013 Coal-fired power to fight back in 2013

 

Staff Reporter

In its latest short-term energy outlook, the EIA says average monthly natural gas prices to power utilities increased by 34% between April and August while coal prices fell slightly.

EIA analysts say coal consumption in the electric power sector will grow by 7.8% to 894 million short tons in 2013 – still well short of the average one billion tons annually consumed by the sector between 2003 and 2008.

Delivered coal prices to the electric power industry continued a decade-long upward trend to be an average $2.40 per million British thermal units in 2011.

“However, EIA expects the decline in demand for coal, combined with the large coal inventories, will begin to put downward pressure on coal prices and contribute to the shutâ€Âin of higherâ€Âcost production,” the agency said.

“EIA forecasts that the delivered coal price in 2012 will average $2.39 per MMBtu, and remain at that level in 2013.”

Total US coal production in 2012 is forecast to be 1028Mt, 66Mt below the 2011 total, while expected 2013 production is 1042Mt.

Coal inventories held by power utilities will grow to 192Mt by the end of 2012, up 17Mt year on year, and are expected to decline slightly in 2013 while remaining at elevated levels.

EIA says it expects US coal exports to remain strong in 2012 and exceed the 107Mt exported in 2011.

“EIA projects coal exports to total a record 124Mt in 2012,” it said. “EIA expects that coal exports will decline in 2013 but remain above 100 Mt.

“The primary reasons for the export decline include China's slower economic growth and increased exports from major coal exporting countries, particularly Indonesia and Australia.

“US exports could be higher if there are supply disruptions from any of the major coalâ€Âexporting countries.”

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