A “Dash for Gas” or a Gradual Evolution of the US Power Fleet?

Since the 1990s, natural gas has steadily gained on coal as the fuel of choice for baseload power generation in the US.  A number of factors underlie this transition, including market forces (a huge domestic supply of natural gas, low gas prices) and policy preferences (difficulty in permitting new coal plants, a growing preference for gas as a cleaner burning alternative).  But, if there is a shock to gas markets or the rate of growth of gas production slows the US energy supply faces increasing exposure to a fuel commodity once considered prohibitively volatile for significant power market penetration.  Today’s GR Energy and Climate Brief examines the prospects for the evolution of the US power fleet to gas and the potential risks associated with a rapid transition.

Coal in the Power Mix

The role of coal in the power mix is declining: the share of power generated by coal has fallen from almost 60% to less than 45% today.  Nevertheless, overall coal use has increased due to growing American energy demand: consumption of coal for power generation has risen by about one third since 1990.  The US economy continues to rely on coal’s ability to provide baseload generation capacity, i.e. power that operates continuously for about 85-90% of all possible hours in a given year. 

Full article here.