Coal, Hydroelectric, Renewables

Utility coal consumption to hit record levels in 96

Issue 5 and Volume 100.

Utility coal consumption to hit record levels in `96

Utility coal use is expected to set a record, increasing to 839 million tons in 1996, up from 824 million tons in 1995, according to predictions from the National Mining Association (NMA). Nonutility coal use for power generation is expected to be 14 million tons in 1996, up from 9.4 million tons in 1994 and 12 million tons in 1995. Coal use in 1995 was boosted by a very cold November and December in the eastern and midwestern regions, providing a strong end to a year that began on a slow note for both utilities and the coal market.

Coal`s share of the 1995 utility generation was an estimated 55.1 percent, down from the 56.2 percent share in 1994. NMA attributes the share drop to an increase in nuclear generation in the coal-heavy East North Central region and in the West South Central region along with a “sharp” increase in hydroelectric generation in the Pacific states.

Coal is predicted to capture 55.5 percent of the utility market in 1996 as hydroelectric generation falls to more normal levels. NMA is expecting utility generation to increase by 1 percent during the year. Utility coal inventories have not been rebuilt to the levels held two years ago, 154 million tons, or 72 days` supply on average. In 1996, as in 1995 and 1994, average supply is expected to hold at about 55 days.

Production sources for utility coal are shifting, partially in response to the Clean Air Act Amendments of 1990 and partially in response to shifting centers of demand. In 1994, sub-bituminous coal use by utilities exceeded use of Appalachian coal for the first time, and the gap is expected to increase into 1996. Illinois Basin coal use has declined as has use of lignite. Utilities are expected to import more than 5 million tons in both 1995 and 1996. Nonutility generation (NUG) continues to have an impact on electricity generation from the traditional utilities, although the rate of increase is slowing. In 1985, utility purchases from NUGs were approximately 40,000 GWh. In 1995, NUGs supplied 222,000 GWh and in 1996 they are predicted to supply 233,000 GWh. Approximately 15 percent of the NUG generation is from coal and 54 percent is from gas.