Analysis: Coal burn falls in central US power grid
Coal-fired generation in June averaged 16,568MW in the pool's balancing area that covers part of nine states in the Gulf coast, southwest and plains regions. The fuel remained the dominant generating fuel with a 59pc share, but it dropped from 63pc in June 2014, based on the grid operator's data.
Natural gas' share in the supply mix rose to 21pc from 17pc. Gas generation in absolute terms increased by 28pc.
Coal-fired power plants in the central US grid in June 2014 consumed 7mn short tons, Energy Information Administration data show. Most receipts that month were PRB coal, with almost two-thirds coming from the Antelope, Black Thunder and North Antelope Rochelle mines in Wyoming. The agency has not yet published data for this month.
Significant declines in natural gas prices are the primary reason for the lower coal burn. While prompt-quarter delivered PRB prices in the midcontinent and Gulf coast this month dropped by 7-8pc on a year-over-year basis, spot natural gas prices in those regions have dropped by about 40pc. Midcontinent natural gas prices are almost at parity with Gulf coast delivered PRB coal prices.
Coal remains the primary generating fuel in the central US grid and typically is the marginal fuel in the Southwest Power Pool's northern part that includes Kansas, Nebraska and parts of Missouri. Gas sets prices more often in the southern portion of the pool.
Total generation in the pool was unchanged from June 2014 even though cooling demand in key states in the first three weeks of June was running higher year over year.
Federal meteorologists predict below-average temperatures in most of the southwest pool's territory in July.
Coal last year accounted for 35pc of installed capacity on that grid, or about 22.5GW. The southwest pool will lose 1,458MW of coal-fired capacity in 2015-16, according to Argus' coal plant retirements database.
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