Coal Power Plants to Increase Capacity, GBI Says

The consumption of coal in North America is expected to grow to 940.4 million metric tons (MMt) over the next eight years, as a result of increased demand from several planned U.S. power plants due for completion by 2015, with a combined capacity addition of 11.5 GW, according to a report from GBI Research.

The report, Coal Mining Market in North America to 2020 – Carbon Emissions and Skilled Labor Shortages Likely to Limit Production, finds that coal consumption in the region is expected to remain strong, despite government regulation seeking to curb coal’s use. Last week the EPA released its first proposed Clean Air Act standard for carbon pollution from new power plants.

North America (excluding Mexico) produced about 1,027 MMt during 2011, accounting for around 14.1 percent of total global coal production. During the same year, power generation accounted for 910.3 MMt, or 93 percent of total coal consumption in North America, GBI Research said.

GBI said that conflicting public opinion, influenced by the nuclear disaster at Fukushima in Japan and opposition to greenhouse gas emissions, are additional factors that will influence the fate of the coal mining industry in North America.

According to the EIA, in the U.S. coal production amounted to 1,089.2 million short tons (988.1 MMt) in 2011. These production totals will fall in 2012, to 1,041.3 million short tons (944.7 MMt) before showing an upward trend in 2013, with 1,044.0 million short tons (947.1 MMt) forecasted, the EIA said.

Coal consumption by the U.S. electric power sector in 2012 is expected to fall below 900 million short tons for the first time since 1996, as the electric industry increases its use of natural gas for power generation. The power sector consumes about 92 percent of U.S. coal production, EIA said.

EIA expects electricity generation from coal to decline by nearly 5 percent in 2012 as generation from natural gas increases by about 9 percent. EIA forecasts that electricity generation from coal will increase by 3.8 percent in 2013, as projected coal prices to the power sector fall slightly while natural gas prices increase, and coal regains some of its power sector generation share.

Photo: EIA