A perfect storm of lower natural gas prices, new emission rules and weak national demand for electricity is causing many utility companies to ditch coal-fired power generation, according to a new report.
Susan Tierney, managing principal at Analysis Group, said it is becoming less expensive to keep coal-fired power plants offline than to keep them running. The reason isn’t entirely because of new EPA emission rules, which the industry has claimed.
“In the past year, coal plants have been facing a perfect storm of falling natural gas prices, a continued trend of high coal prices and weak demand for electricity,” Tierney wrote in the report.
Tierney wrote that those factors have combined to make coal a less desirable fuel source.
Coal-generated electricity has been waning over the past few years, dropping to its lowest level on record in March of this year, according to the U.S. Energy Information Administration.
At the same time, natural gas-powered plants are becoming increasingly popular as the price of the fuel falls to record prices and few emissions emitted by natural gas.