The U.S. Energy Information Administration on Tuesday projected coal will briefly retake its crown from natural gas as the primary fuel for power generators in 2017 due to an increase in gas prices. Coal, however, is expected to lose that title again in 2018 as producers boost gas output and utilities to retire more coal plants for environmental and economic reasons, EIA said in its July Short-Term Energy Outlook (STEO).
Coal lost its title to gas for the first time ever in 2016 when gas prices dropped to their lowest since 1999. Coal had been the primary fuel for U.S. power plants for the last century. The EIA forecast gas prices would rise to $3.10 per million British thermal units in 2017 and $3.40 in 2018 from a 17-year low of $2.51 in 2016. It projected coal’s share of generation would rise to 31.3 percent in 2017 before sliding to 31.2 percent in 2018. That compares with 30.4 percent in 2016. Last month, it projected coal’s share would reach 30.9 percent in 2017.