Has Utility Coal Fired Generation Finally Bottomed?
NEW YORK | Tue Feb 12, 2013 1:51pm EST
Feb 12 (Reuters) - Coal-fired power generation rose 8.9 percent last month above January 2012 on higher electricity demand and gas prices and less power generated from nuclear and renewable sources, energy data provider Genscape said on Tuesday.
Overall power demand started 2013 out 3.2 percent higher compared with January last year, driven by very cold weather in the fourth week of January.
Genscape monitors hundreds of power plants throughout the United States that show which plants are running and at what capacity.
Power generated from renewable energy, primarily hydro and wind, was 1.32 percent lower last month compared with January 2012.
Natural gas-fired power generation has been increasingly encroaching on coal's market share in the last three years as ballooning gas production has lowered prices and coal has fallen out of environmental favor.
But once gas prices begin to rise, coal becomes more economical to burn.
Natural gas futures prices on the New York Mercantile Exchange rose to a high of $3.645 per million British thermal units (mmBtu) in January 2013, as cold weather created demand for gas-fired heating. Futures prices failed to rise beyond $3.12 per mmBtu in January 2012 due to mild weather.
And don't forget, when the expansion to the Panama Canal is completed in 2015, coal exports to foreign countries could increase by a great amount. NSC shareholders need to enjoy/invest the dividend and be patient.