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Can Coal Comeback?   Arrow divider image - marks separation between nested pages that are listed as breadcrumbs.

Written By: Cary Weiner on March 29th, 2017

President Trump recently signed Executive Orders to lift a moratorium on coal leasing on federal land and to formalize a review of the Obama-era Clean Power Plan. Most energy experts, however, argue that coal still faces a tough road ahead because of cheap gas and renewables (primarily wind). This assertion can be visualized below, where falling gas prices since the dramatic rise of hydraulic fracturing in 2008 have resulted in gas replacing coal generation.

Effect of Natural Gas Prices on Coal Generation

 

 

 

 

 

 

 

 

 

 

 

In fact, natural gas has replaced 2/3rds of coal’s lost generation in this time, with wind (23%), and solar (8%) largely making up the remainder of coal’s decrease. Of course wind/solar are intermittent so cannot directly replace coal as a baseload resource. Part of gas’s growth (and the decline in coal generation) may be due to its ability to complement these intermittent renewable energy sources.

But you get the point: while natural gas power prices fell 68% from 2008 to 2016, coal prices to the electric power sector rose 4.7% in almost this same time period (through 2015). If coal is to make a comeback, new policies will need to move the free market in a more dramatic fashion than most see possible right now.

 

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