he US Energy Information Administration (EIA) lowered its US coal consumption and generation forecasts for this year and 2024 as natural gas prices have been lower than expected.

The agency today revised its forecast for overall coal consumption down to 410.4mn short tons (372.3mn metric tonnes) in 2023 and 397.4mn st in 2024, from 512.6mn st in 2022. Electric power sector coal use will slide to 371mn st this year and 358mn st in 2024 from 469.9mn st last year, the EIA said today in its monthly Short-Term Energy Outlook.

EIA previously expected electric power sector coal use to decline to 378.5mn st in 2023 and rise to 380mn st next year, and total coal demand to be 416.9mn st this year and 418.2mn st in 2024.

Similarly, coal-fired generation in the electric power sector is expected to fall at a more rapid pace than anticipated a month ago. Coal power in the US may fall by 24pc from 2022 levels to 629.1bn kWh this year. EIA expects that US coal-fired generation during second half of this year will be 75bn kWh, or 18pc, less than over the same period of 2022. Coal power will decrease again in 2024 to 610.5bn kWh, or 15pc of the country’s generating fuel mix, EIA said.

In June, EIA expected US coal generation to be 22pc lower this year than in 2022 and then inch up by 1.4pc to 650.5bn kWh in 2024.

Coal will face greater competition from natural gas and renewable power than EIA previously thought.

EIA forecasts “record-high natural gas consumption” in the US for electricity generation during the first two summer months as hotter weather boosts cooling demand across the country. In addition, about 6,000MW of new combined-cycle natural gas turbine capacity has come online in 2023, making electricity generation from the fuel more economical than it has been in the past, according to EIA.

The agency expects about 4pc more electricity generation from natural gas in July and August than in the same months of 2022.

Natural gas will provide 46pc-47pc of US electricity for those two summer months and 41pc of US electricity for 2023 as a whole, according to EIA’s forecasts. Gas-fired generation may rise to 1,661bn kWh this year from 1,586bn kWh in 2022.

The agency lowered its outlook for spot natural gas prices, citing existing surplus of natural gas inventories. It now expects the spot Henry Hub natural gas price to average $2.66/mmBtu in 2023 and $3.42/mmBtu in 2024, down from EIA’s previous expectations of $2.91/mmBtu and $3.72/mmBtu, respectively.

EIA also expects a 6pc increase in electricity generation from renewables and a 2pc increase in generation from nuclear energy in July and August 2023 compared with 2022.

For 2023 as a whole, renewable generation will climb to 915.6bn kWh from 883.1bn kWh. It will increase again next year to 1,027bn kWh, EIA projected.

US operators have added nearly 15,000MW of capacity from wind and solar so far this year.

Coal production in the US is expected decrease by 4.2pc in 2023, to 572mn st, and fall by 23pc in 2024 to 460mn st.

US thermal coal exports will increase this year to 45.8mn st from 39.5mn st in 2022. Seaborne thermal coal shipments are expected to increase again in 2024, to 48.3mn st, EIA said. Metallurgical coal exports also are expected to rise both years, bringing total international US coal shipments up to 95.7mn st in 2023 and 103.4mn st in 2024 from 86mn st in 2022.

View article here.