Tuesday, April 9, 2013

Coal Fights Back for Electricity Market Share

The latest EIA electricity generation figures show that natural gas represented 25.3% of net power generation in January 2013, compared to 39.7% for coal and 34.9% for all other sources, including alternatives.  After nearly being equal in the mid-32% range in April 2012, coal and gas have diverged significantly, which mostly has to do with an increase in the price of natural gas.

On a year-over-year basis, however, 2012 was the best year for natural gas in power generation in the past ten years, representing 30.4% of total generation, compared to 37.4% for coal and 32.2% for all other sources.  That's not bad considering natural gas represented only 17.9% of net generation in 2012.

What this shows is that natural gas is gaining market share from coal, but at this time the gains are largely based on the depressed price of natural gas.  As coal plants close over the next five to ten years, the basis for increased market share by gas will be more sustainable and less price dependent.

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