Coal’s share in US power generation forecast to inch up

Coal’s share growth in 2021 and 2022 could slightly edge out the pace of renewables; Pennsylvania awards $31.3M to freight rail projects

Coal’s share in the generation of U.S. power could grow in 2021 and 2022 amid expectations that higher natural gas prices will spur natural gas’ share to decline, the U.S. Energy Information Administration (EIA) said in its Short-Term Energy Outlook on Tuesday.

The outlook projects that the share of U.S. electric power sector generation from natural gas could fall from 39% in 2020 to 36% in 2021 and 34% in 2022 amid “significantly” higher natural gas fuel costs and an increasing share in power generation from renewable energy sources, EIA said.

As the share from natural gas falls, coal’s share could rise from 20% in 2020 to 22% in 2021 and 24% in 2022, “which is close to its share in 2019,” EIA said.

The share from renewable energy sources is forecast to rise as well, albeit at a slightly slower pace than coal. EIA projects the share from renewables to rise from 20% in 2020 to 21% in 2021 and 23% in 2022. Renewable energy sources include hydroelectric power, geothermal, solar, wind and biomass.

WIth coal’s share expected to rise in 2021 and 2022, U.S. coal production could also grow during this time frame, EIA said. The federal agency forecast that after falling by an estimated 24% to 537 million short tons (MMst) in 2020, coal production could grow by 12% to 603 MMst “because of a forecast 41% increase in natural gas prices for electricity generators, making coal more competitive in the electric power sector,” EIA said.

Meanwhile, U.S. coal production could increase to 628 MMst in 2022, according to EIA.

However, despite the projected increase in coal’s share of power generation to 22% in 2021 and 24% in 2022, these levels are still “the second- and third-lowest share in history after the 20% share in 2020,” EIA said. In contrast, coal’s share was 46% in 2010, EIA said.

Coal carloads still down year-over-year

Although EIA projects coal’s higher share in U.S. power generation in 2021, that growth has yet to translate into higher U.S. coal carloads for the first several days of the new year. 

Indeed, U.S. coal carloads for the week ending Saturday totaled 60,780 carloads, down 14.2% from the same period in 2020, according to data from the Association of American Railroads

For context, U.S. carloads on a weekly basis totaled 235,404 carloads, a 1.6% decline year-over-year. 

Higher carload volumes for grain, metallic ores and metals, and chemicals helped overall U.S. carloads move higher. U.S. grain carloads were up 51.4% to 27,650 carloads, metallic ores and metals carloads rose 12% to 23,600 carloads and chemicals carloads increased 7.3% to 36,195 carloads.

Meanwhile, U.S. intermodal traffic was 10.4% higher than the same period a year ago, at 289.849 intermodal units.

Combined U.S. carload and intermodal volume was 525,253 carloads and intermodal units, a 4.7% gain year-over-year.

U.S. rail carloads (blue: RTOTC.USA), intermodal trailers (orange: RTOIT.CLASSI) and containers (green: RTOIC.CLASSI) over the past year. (FreightWaves SONAR)

Pennsylvania to invest $31.3 million on 26 freight rail improvement projects

Pennsylvania Gov. Tom Wolf said Tuesday that the State Transportation Commission has voted to approve $31.3 million for 26 freight rail improvement projects. 

The projects garnered funding through the Rail Transportation Assistance Program and the Rail Freight Assistance Program. 

“Investing in our state’s rail system creates jobs and supports efficient freight travel,” Wolf said. “These investments help us build a world-class infrastructure system and support the business community.”

Pennsylvania has 65 operating railroads, which is more than any other state, consisting of roughly 5,600 miles of freight lines.

The list of projects is available here.

Subscribe to FreightWaves’ e-newsletters and get the latest insights on freight right in your inbox.

Click here for more FreightWaves articles by Joanna Marsh.

Related articles:

US energy consumption from renewables poised to outpace coal

Coal, petroleum and sand drive BNSF’s operating revenues lower

Coal puts pressure on Norfolk Southern’s third-quarter revenue

Joanna Marsh

Joanna is a Washington, DC-based writer covering the freight railroad industry. She has worked for Argus Media as a contributing reporter for Argus Rail Business and as a market reporter for Argus Coal Daily.