Following up on last week’s Coal Tattoo discussion of the latest study on “Peak Coal,” there’s an important piece in today’s Wall Street Journal about utilities making the switch from coal to natural gas.
Power companies are increasingly switching to natural gas to fuel their electricity plants, driven by low prices and forecasts of vast supplies for years to come.
While the trend started in the late 1990s, the momentum is accelerating and comes at the expense of coal. Some utilities are closing coal-fired plants; others are converting them to run on gas.
The switch is occurring globally and is getting a push from regulators who want to limit emissions that contribute to climate change, haze and health problems such as respiratory illness. Though efforts in Congress to pass legislation attaching a price to carbon emissions appear stalled for now, utilities still anticipate eventual carbon restrictions. The Tennessee Valley Authority, for example, recently announced a 20-year development plan that emphasizes nuclear and gas, and includes fewer coal units.
In China and India, though, no such shift is occurring—yet. Both nations rely on coal—an abundant local resource—for most of their power and lack the sort of integrated gas-pipeline networks that make switching to gas possible in the U.S. China’s government has pledged to roughly double the percentage of electricity the country gets from non-fossil sources, to 15% from 8%, by 2020. But much of that new energy will come from hydropower. India, meanwhile, has agreed to cut its carbon emissions 20% from 2005 levels by 2020. But the country doesn’t have enough domestic gas to support a large-scale shift to that fuel, although government agencies are considering increasing imports of liquefied natural gas to take advantage of a growing global glut.
The falling price of natural gas in the U.S., to about $4 per one million British thermal units, has helped gas capture an ever-increasing share of power generation. Hardly a week goes by without a company announcing changes that push coal to the sidelines, usually in favor of natural gas, renewables or nuclear plants.
It’s worth a read …