Survey: Utility Industry Expects Natural Gas to Continue Replacing Coal

Natural gas will continue to gain electricity market share at the expense of coal power, even with President Donald Trump relaxing environmental restrictions on coal power, utility industry representatives predicted in a newly published survey. The survey underlines the economic factors driving the ascension of natural gas power at the expense of coal.

Utility Drive, a news and analysis publication for the utility industry, surveyed more than 600 utility industry employees in an online survey. Asked whether Trump’s election would help or hurt the outlook for coal power at their utility, 49% percent said Trump’s election improves the outlook for coal, 45% said Trump’s election will not make much of a difference, and 7% said Trump’s election will have a negative impact on coal’s outlook. Nevertheless, Trump’s policy tailwinds will not be enough to prevent coal from continuing to lose market share to natural gas, respondents predicted.

electric power line pixabaay 1Asked how they expect their utility’s power mix to change during the next 10 years, 2% said they expect coal use to increase significantly, 2% expect coal use will increase moderately, 18% expect coal use to stay the same, 27% expect coal use to decrease moderately, and 52% expect coal use to decrease significantly.

The outlook for natural gas power was much better. According to the same respondents, 22% expect natural gas use to increase significantly, 42% expect natural gas use to increase moderately, 25% expect natural gas use to stay the same, 9% expect natural gas use to decrease moderately, and 2% expect natural gas use to decrease significantly.

Although people concerned about air pollutants and carbon dioxide emissions welcome natural gas replacing coal power, the news was not all good for clean air advocates. The survey showed only 8% of respondents expect their utility to increase its share of emissions-free nuclear power, versus 38% who expect their utility to decrease its share of nuclear power.

The outlook for emissions-free hydro power was somewhat better than for nuclear power, with 6% of respondents expecting their utility to decrease its share of hydro power, versus 21% expecting their utility to increase its share of hydro power.

The economics driving natural gas’ ascendancy is evident in price data regarding U.S. electricity prices. Since advances in hydraulic fracturing (fracking) and directional drilling technologies ushered in low-cost natural gas production a decade ago, natural gas production has gained electricity market share at the expense of coal and U.S. electricity prices have declined in inflation-adjusted dollars. Since 2008, coal’s share of U.S. electricity generation has declined from 48% to 30%, while natural gas’ share of U.S. electricity generation has risen from 21% to 34%.

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