Energy Economy

Coal Consumption Drops Below Renewables for First Time in 135 Years

Beginning in the mid-1800s, coal overtook wood (a renewable fuel) as the primary source of energy in the United States. In 2016, natural gas-fueled more electricity generation than coal, and last year, Americans consumed more energy generated by renewables than by coal.

The data was reported on Thursday by the U.S. Energy Information Administration (EIA). Last year, U.S. renewable energy consumption totaled 11.5 quadrillion BTUs (called quads) compared to 11.3 quads for consumption of energy generated by burning coal.

In the first quarter of this year, natural gas supplied 39.7% of the nation’s power, compared with 34.5% in the same period last year. Coal generation accounted for 17.8% of first-quarter power, down from 26.1% a year ago, while renewable generation supplied 20.1%, up from 17.9% a year ago.

Wind accounted for the largest share of U.S. renewable power during the quarter, 9%, followed by conventional hydroelectric, which generated 7.4% of U.S. power. Nuclear generation accounted for 21.2% of first-quarter power, trailing only natural gas.

Renewable power generation was expected to surpass coal generation later this year, but the latest EIA consumption data make clear that the transition already has occurred.

According to the EIA, U.S. coal consumption in 2019 decreased for the sixth consecutive year to its lowest level since 1964. The agency’s report continued: “Electricity generation from coal has declined significantly over the past decade and, in 2019, fell to its lowest level in 42 years. Natural gas consumption in the electric power sector has significantly increased in recent years and has displaced much of the electricity generation from retired coal plants.”

Benjamin Nelson, Moody’s Investor Services vice president, senior credit officer and lead coal analyst, commented, “We expect ongoing secular decline in the demand for coal, accelerated by the economic fallout from the global outbreaks of Covid-19, will persist in the early 2020s.”

Natural gas futures continue to trade below $2 per million BTUs, even though cutbacks in gas production associated with oil wells have risen sharply. New construction of wind and solar generation, however, keeps putting price pressure, even at these low price levels.

Last year, 23,328 megawatts (MW) of new power generation was added in the United States. Of that, 9,100 MW were wind-powered and 5,300 MW were solar. Natural gas accounted for 8,300 MW of new power generation capacity. Nearly 14,000 MW of coal-fired generation was retired last year.