August 7, 2024 - Coal's share of US electricity generation will shrink to an all-time low at 16.1% in 2024 due to lower utilization rates and ongoing capacity retirements, according to US Energy Information Administration data released Aug. 6.

The remaining generation was expected to come from natural gas at 41.6%; nuclear, 19%; and renewable energy sources, 22.8%.

"Although natural gas continues to provide more U.S. electricity generation than any other source, we expect growing generation from renewables will displace more natural gas over time," the EIA said in its August Short-Term Energy Outlook.

The EIA projected 2024 coal production at 499 million st, down 14.2% from 2023. Coal production was expected to fall another 5% in 2025 to 474 million st.

US coal-fired power plants will probably have to pull from their inventories in 2025 as coal production decreases at a faster rate than power sector coal consumption, the EIA said.

"We expect the US electricity power sector will consume 384 million st of coal this year, 1% less than it did in 2023," the EIA said. "We expect the power sector will consume an additional 2% less coal next year. With US coal production falling more quickly than coal consumption, we expect that coal will be consumed from inventories next year."

The EIA said US utility coal inventories were at 120 million st at the end of July and are expected to drop to 84 million st at the end of 2025.

Meanwhile, electric power sector coal consumption was expected flat on the year at about 384.1 million st in 2024. In 2025, coal consumption for electricity was projected to fall 1.9% on the year to 176.8 million st.

Total coal consumption was projected at 420.9 million st in 2024, down 0.8% on the year. Total coal consumption was projected to fall to 413.9 million st in 2025.

The cost of coal to electric utilities was projected at $2.53/MMBtu in 2024 and $2.51/MMBtu in 2025, compared with a Henry Hub spot price projected at $2.39/MMBtu in 2024 and $3.39/MMBtu in 2025.

Platts Aug. 5 assessed September-delivered Central Appalachia 12,500 Btu/lb CSX rail coal flat on the session at $74.25/st, or $2.97/MMBtu, based on broker indications of value at $74/st and $74.50/st, tested in the market through 4:30 pm ET. Platts is part of S&P Global Commodity Insights.

Powder River Basin 8,800 Btu/lb rail coal closed at $13.95/st, or $0.793/MMBtu, on Aug. 6, based on broker indications of value at $13.90/st and $13.95/st.

In export markets, EIA projected US coal exports at 103 million st in 2024, which would be 3% higher than 2023 if realized. Coal exports were expected to climb another 0.8% on the year to 103.8 million st in 2025.

"Although coal exports in our forecast remain robust, ongoing declines in coal production are the result of less coal being used to generate electric power domestically due to relatively low natural gas prices and 12 GW of coal-fired electricity generating capacity going into retirement," the EIA said.