PJM January coal burn falls, reversing months of gains

Coal-fired power in the largest US power grid fell in January for the first time in eight months.

Coal generation in the PJM Interconnection fell by 1pc from a year earlier to nearly 25mn MWh. The fuel's share of the power mix held relatively flat at 35.3pc compared with 35.4pc in January 2016.

January's modest decline for coal output reverses gains that had started in June and appeared to be mostly tied to an increase in nuclear generation, which inched up by 0.55pc to just over 26mn MWh. Output from smaller fuel sources including solar, petroleum coke and captured methane also rose. Total generation from the grid fell by just 0.6pc to 70.8mn MWh.

More typical summer and fall weather helped to boost coal consumption in PJM from June to December 2016. Coal-fired generation in PJM totaled 177.8mn MWh in the final seven months of last year, 14pc more than in the same period of 2015.

Electricity generation in the grid fell as temperatures rose above-normal in January, leaving less demand for coal and other power sources.

Natural gas generation fell by 0.47pc to 15.9mn MWh in January and accounted for 22.4pc of the fuel mix, essentially the same as it had a year earlier. Wind power declined by 2.5pc in January, to 2.04mn MWh.

Declining natural gas prices may have prompted some coal-to-gas switching later among PJM generators in January and could have been a weight on February coal generation.

The day-ahead index for gas delivered to Texas Eastern Transmission zone M-3 averaged $3.324/mmBtU in January, down by 9.25pc from $3.662/mmBtu in December. The index fell even further in February, to an average $2.621/mmBtu.

But gas-fired generation in PJM has grown regardless of price. From June-December 2016, natural gas-fired output rose by about 20pc to 139.5mn MWh.

For all of last year, natural gas generation rose by 18.3pc, while coal fell by 3pc, to 275.3mn MWh, and nuclear was unchanged.