US EIA says decline in generators' coal consumption growing

Washington (Platts)--12Oct2011/333 pm EDT/1933 GMT


The US Energy Information Administration expects a 3.9% decline in the electricity generation sector's coal consumption in 2012, it said Wednesday.

That fall in demand is somewhat steeper than EIA's expectations a month ago, in its September Short-Term Energy Outlook, when it forecast a 2.3% drop in consumption, data shows.

According to the agency's latest projections, in its October STEO, the electricity generation sector's coal consumption will fall to 919.6 million short tons in 2012, down 3.9% from the estimated 957 million st in 2011.

The expected 3.9% decrease in 2012 assumes an overall lower level of electricity consumption, coupled with increases in nuclear and natural gas-fired generation, EIA said.

The US electric power sector, defined as electric utilities and independent power producers, is forecast to generate 10.883 billion kWh/day in 2012, down 0.7% from the 10.965 billion kWh/day estimate for 2011.

Of this amount, coal-fueled power generation is forecast to fall to 4.757 billion kWh/day in 2012 from 4.934 kWh/day in 2011. Natural gas-fired generation is expected to increase to 2.569 billion kWh/day in 2012 from 2.497 billion kWh/day in 2011. Nuclear plant output is expected to increase to 2.221 billion kWh/day from 2.137 billion kWh/day in the same time frame.

Meanwhile, the EIA is expecting US coal production to decline by nearly 24 million st, or 2.2%, to about 1.045 million st in 2012 as domestic consumption and exports fall and inventories at electric power plants decline. In September, the agency expected 2012 output to be level with 2011's levels at around 1.061 million st.

By region, output in Appalachia is expected to fall 5.6% to 319.7 million st in 2012. Production in the Interior is expected to drop 7.9% to 145.8 million st. Western production is projected to improve 1.4% to 579.6 million st.

--Charlie Noh, chang_noh@platts.com

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