US power system set to cut coal use to record lows in Commodity News- 10/04/2024
Utilities in the United States are on track to cut the share of coal in national power generation to record lows over the coming months, as the heating demand season ends and output from clean power sources such as solar and wind farms hits record highs.
During the first three months of 2024, coal’s share of the overall U.S. power mix has been around 16%, according to data compiled by LSEG, down from 17% during the same period a year ago and 24.3% during the first quarter of 2021.
Since March 1, that share has dropped to 12.6%, the lowest for that period going back to 2021, and likely the lowest ever.
If heating demand drops off as usual during April and May while generation from solar and wind sites picks up, power producers will likely be able to trim coal use further in the coming weeks, potentially to less than 10% of the total.
Such a low share for coal generation would mark a key milestone for climate watchers looking to phase out use of high-polluting fuels in power systems, especially in parts of the country where abundant supplies of cleaner power are available.
And even if coal use rebounds during the summer as utilities crank output to meet demand from power-hungry air conditioners, the potential dip of coal’s share into single digits this year suggests that total halts to coal use might be viable at times within the coming years.
KEY COAL USERS
The United States is the third largest coal user behind China and India, and emitted around 640 million metric tons of carbon dioxide from coal-fired power generation in 2023, according to energy think tank Ember.
More than 3,000 electric utility companies provide power to more than 140 million customers across the U.S., according to the U.S. Energy Information Administration (EIA).
The power mix utilised by those utilities varies greatly, with the proportion of power from clean sources ranging from 75% or more in Vermont and Washington state to less than 10% in Kentucky, West Virginia and Delaware, according to electricity market data firm Choose Energy.
Seven states get 50% or more of their electricity from coal: Nebraska (50%), Indiana (53%), North Dakota (61%), Missouri (65%), Wyoming (69%), Kentucky (70%) and West Virginia (88%).
Utilities are often part of power systems that have customer bases that cross state lines, so power sector emissions trackers need to monitor the power mixes used by system operators to get a read on the potential for cuts to coal-fired output going forward.
The Western Area Power Administration (WAPA) had the highest proportion of coal-fired power in its generation system in 2023, followed by the Associated Electric Cooperative (AEC), which serves Missouri and parts of southern Iowa, according to data compiled by electricitymaps.com.
Serving customers in parts of South Dakota, Nebraska, Colorado and Wyoming, the WAPA system used coal to generate 61.18% of its total electricity load in 2023, resulting in a system-wide carbon intensity of electricity generation of 725 grams of carbon dioxide (CO2) per kilowatt hour (KWh).
The AEC system used coal to generate 47% of its electricity in 2023, and natural gas to generate an additional 41%, and had a system carbon intensity of 678g of CO2/KWh.
The Pacificorp East (PE) system, spanning from western Wyoming through parts of Utah and Arizona, used coal to produce 47% of electricity last year, gas for an additional 22%, and had a system carbon intensity of 659g CO2/Kwh.
In comparison, the California Independent System Operator (CAISO), which uses no coal and is nearly 60%-powered by clean sources such as solar, wind, nuclear and hydro facilities, had a carbon intensity of 240g CO2/KWh.
COAL CUT POTENTIAL
While coal was the primary power source for electricity in the WAPA, AEC and PE systems, those utilities have seen a rapid rise in generation from other sources in recent years that will allow for power fuel switching over the course of the year.
In the WAPA system, nearly 30% of electricity came from hydro and wind sites in 2023, while around 8% came from gas.
That suggests that as winter heating demand fades over the coming weeks, power generators have the potential to slash coal use and generate any electricity supplies with cleaner sources.
Similarly in the PE system across Wyoming and Utah, nearly 25% of electricity came from renewables in 2023, and an additional 22% from gas, which could all be deployed in greater quantities during the coming months and replace any potential dial-down in coal utilization.
The coal-heavy AEC system in Missouri produced less than 12% of electricity from renewables in 2023, so has relatively less clean power back-up if coal output is reduced.
But even there natural gas accounted for 41% of generation in 2023, which means the utility could switch out some coal for gas during the low heating demand season and thereby still meaningfully reduce power emissions.
Not all U.S. utilities will be able to make steep cuts to coal use and still keep electricity supplies at adequate levels.
But in most coal-heavy areas, utilities are well placed to dial back coal generation during low heating demand periods such as during April and May, and so are currently in a position to help contribute to national pollution reduction goals over the coming weeks. Source: Reuters (Reporting by Gavin Maguire; Editing by Jamie Freed)
