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Apr 30, 2024

Coal still has a purpose in large scale power generation, but alternative and more sustainable fuel sources, like natural gas, continue to gain popularity.

At one time, coal was the go-to fuel source for power generation. But that day has long since passed. And now, the U.S. is on the verge of reaching a new milestone: the least amount of coal needed to maintain current energy output.

Coal still has a purpose in large scale power generation, but alternative and more sustainable fuel sources, like natural gas, continue to gain popularity. Meanwhile, renewable energy alternatives, and proliferation of Battery Energy Storage have steadily grown over the last decade or so to produce unprecedented levels of power. So what is coal's future?

Record Lows for Coal Consumption

A recent Reuters report suggests that U.S. utilities are, "on track to cut the share of coal in national power generation to record lows." Granted, the end of the winter heating season is a significant contributing factor. Once summer arrives in earnest, utilities could be back to burning the same amount of coal to power AC units.

Nonetheless, coal-fired power generation accounted for about 16% of the total output during the first quarter of the year. It was 17% for the same period last year. Coal made up more than 24% of the total power generation in Q1 2021.

Now the interesting news: from March 1 through the first week of April, coal's total share fell to 12.6%. Some industry experts say that over the next several months, the number could fall below 10%.

We Still Need Fossil Fuels

With record low numbers for coal consumption in the news, it is too soon to predict the end of fossil fuels for power generation. Coal will still be needed to one extent or another. Solar, wind, and other renewable and sustainable power sources are gradually maturing and shouldering a heavier power generation load. Even with these advances, the renewable energy industry is still not ready to fully take over.

The question is to what extent coal needs to continue being part of the equation. For example, converting coal-powered plants to natural gas is a daunting task, and new solar or wind grid interconnection can be challenging due to an aging power grid. Whether or not it is practical or economically feasible needs to be decided on a case-by-case basis.

It should be noted that quite a few states still derive the majority of their electricity from coal. West Virginia tops the list at 88%. Kentucky comes in second at 70%, followed by Wyoming and Missouri at 69% and 65% respectively.

Renewable Energy on the Rise

The other side of the fossil fuel coin is renewable and sustainable energy. Just as there are some states still relying heavily on coal for power generation, others have embraced renewables with remarkable success. For example, Vermont derives about 75% of its total energy from renewable sources. Washington and California are also increasing renewable energy utilization.

Renewables will not be ready to compete with fossil fuel output overnight. The long term investment needed for renewable energy to hit its stride has been expected. But with maturity now on the horizon, clean energy is proving itself to be a more attractive option than legacy power generation. In certain scenarios, it is proving cheaper yet equally reliable.

Time will tell whether or not coal numbers dip into single digits during the summer months. Even if they hover just above the 10% figure, it’s a sign of the drastic changes in the amount of coal burned for power generation. Things are only going to continue to change  as we learn more effective ways to harness renewable and sustainable energy sources at scale.

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