BAKU, Azerbaijan, October 11. The U.S. Energy Information Administration (EIA) projects a significant decrease in U.S. coal consumption in the electric power sector, anticipating a 12% drop in October compared to September, Trend reports.
This follows a substantial 22% decline in coal consumption in September from August levels. Such reductions are typical during the shoulder season of September and October, leading to decreased overall electricity generation. Additionally, natural gas prices have remained competitive, further influencing the shift away from coal.
Looking ahead, the EIA expects a 3% uptick in coal consumption in November, with a sharper increase of 32% projected for December as winter sets in. This surge is attributed to rising power demand and a forecasted increase in natural gas prices, which are expected to approach $3.20 per million British thermal units (MMBtu) in December, while coal prices remain relatively low.
While coal continues to be a significant fuel source for power generation, particularly in the mid-Atlantic and Midwest regions, natural gas has increasingly become more cost-competitive over the past decade. The thermal efficiency of combined-cycle natural gas turbine plants has contributed to this trend, making the effective price of natural gas even lower than its nominal price compared to coal.
Despite the declining trend in coal production expected in 2025, the EIA anticipates an overall increase in coal consumption in the electric power sector, driven by rising electricity demand from the growth of data centers and other sources. Consequently, coal inventories held by electric power plants are projected to decrease from 130 million short tons (MMst) at the end of 2024 to approximately 100 MMst by December 2025.