“A recent increase in U.S. natural gas prices and a decline in coal is set to dent demand for gas as utilities use more coal to generate power, electricity traders said on Tuesday.”
“A recent increase in U.S. natural gas prices and a decline in coal is set to dent demand for gas as utilities use more coal to generate power, electricity traders said on Tuesday.”
Utilities mostly hedge these kind of bets, opting for a mixed generation portfolio. Not an optimal result, but given the construction lead times, the only manageable option.
This seems tricky to me. I imagine it would be hard to build an electrical generator that could readily switch between gas and coal as prices change. Gas would come through a (big, I assume) pipe but coal has to be stored on-site and handled very differently.
That makes it difficult for a utility to decide how to operate, it seems to me.