Natural gas to become leading fuel

For the first time during a calendar year, more U.S. electricity is projected to come from natural gas than from coal, according to new data from the Energy Information Administration (EIA).

In its Short-Term Energy Outlook, EIA said it has revised its estimate, made last month, of how coal-based plant retirements will affect generation in the coming years.

“Coal generation is now expected to decline by 3 percent in 2016, in contrast to relatively little change forecast in last month’s [report],” EIA said March 8.

If EIA’s projections are correct, coal’s share of power generation will be 32 percent in 2016, slightly less than the 33.4 percent share forecast for natural gas.

While natural gas generation had surpassed coal in some months, EIA said its new numbers represent the first time natural gas has been the leading fuel source on an annual basis.

The two fuels are likely to run neck and neck in generation in 2017 as long as natural gas prices move up from their current historic lows, EIA said.

EIA said 18 gigawatts of coal, or about 4.6 percent of U.S. coal capacity, was retired in 2015, primarily in Ohio, Georgia, and Kentucky as a result of low natural gas prices and new environmental regulations.

“About 30 percent of the coal capacity that retired in 2015 occurred in April, which is when the U.S. Environmental Protection Agency’s Mercury and Air Toxics Standards (MATS) rule went into effect,” the agency said.

Some coal plants applied for and received one-year extensions, meaning that many of the coal retirements expected in 2016 are likely to occur in April, EIA added.

The mild winter weather also has slowed down the use of coal, EIA said, forecasting that coal consumption in the power sector — as opposed to generation — will fall by 4 percent as a result.