<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=429271514207517&amp;ev=PageView&amp;noscript=1">
Screen Shot 2018-03-28 at 1.33.04 PM

Moody's: Coal Share of U.S. Generation to Drop Sharply; Gas and Renewables to Replace It

1 minute read

A new, private report by Moody's Investor Service ("U.S. Electric Power Generation Volumes: Shift in Electric Generation Mix Favors Natural Gas, Renewables at Expense of Coal"), discussed here by Energy Watch, forecasts that the long reign of King Coal in the U.S. power mix may soon be reaching its end.

...coal is projected to drop to roughly 30% of US generation in 2020, from 50% in 2009.

Given a plentiful US gas supply, Moody's doesn't believe prices will be "fundamentally impacted" by higher consumption -- prices would need to rise to $7/Mcf or $8/Mcf before the power sector would "aggressively" look to alternative sources, most likely renewables, rather than coal.

"Beside natural gas generation, the other big winner from the generation shift is renewable generation, specifically wind and solar, neither of which produce harmful emissions," Moody's said.

In sum, the question is not whether the U.S. power generation sector will move away from "King Coal," but which other fuel sources - natural gas, wind, solar - will replace it (and how rapidly). In part, of course, this will depend on government policies, such as environmental regulations on air and water pollution from practices like "fracking;" federal and state subsidies for various fuels; and potential taxes on greenhouse gas emissions.  These policies could have a major impact on whether coal is replaced more by clean energy, or whether the U.S. economy continues to be powered primarily by fossil fuels for the next few decades. It almost goes without saying that we believe the better option is the former, not the latter.