| On grids with competitive markets that still have a mixture of operational coal and combined cycle gas turbine plants, the short term coal/gas balance is strongly influenced by short term pricing trends. See for example this article, which is a few years old but still illustrative: "Coal-to-Gas Switching: It’s All in the Price" https://www.powermag.com/coal-to-gas-switching-its-all-in-th... A coal-to-gas parity calculation—using current average Illinois Basin spot coal prices, current SO2 and NOx emissions costs, a $9.00/ton coal transportation cost, a $1.50/MWh average variable non-fuel O&M cost, and adjusted for the higher efficiency of a 7,500-Btu/kWh CCGT plant versus a 10,500-Btu/kWh coal plant—yields a gas floor of $4.15/MMBtu. While this gas parity calculation is broad, it indicates a move toward some potential for coal-to-gas switching for plants consuming Illinois Basin coal if actual forward delivered gas costs are in the range of those previously calculated. A parity calculation for Powder River Basin coal using the same heat rate assumptions and emissions costs, current coal market prices, and a transportation rate of $16/ton yields a gas floor price of $2.42/MMBtu. While individual plant costs may vary, this indicates limited displacement of PRB coal in the Midwest when compared against the calculated forward gas price curve. Depending on the coal source, it makes short term sense to displace as much coal as possible with gas at a gas price point below either $4.15/MMBtu or $2.42/MMBtu. For comparison, current Henry Hub gas spot prices are below $1.70/MMBtu: https://www.eia.gov/dnav/ng/hist/rngwhhdM.htm Gas is currently taking market share against coal up to the limits of generator capacity in any competitive market in the continental US. Part of the coal fleet still operates because there is not enough gas generator capacity yet built to replace all coal generators. Another part of the coal fleet still operates because the plants are operating as part of regulated utilities that do not have to compete with/respond to short term market incentives. If gas prices shot up to $5/MMBtu, there would be a dramatic short term shift back toward coal. The fuel mix "floats" in the short term. In the long term, the factors promoting gas plants in the US are more of a ratchet than a float. The median coal plant is much older than the median gas plant. Many of them are reaching end-of-life. Building a new 500 megawatt coal plant is significantly more expensive and slower than building a new 500 megawatt CCGT gas plant. Once built, coal plants require more maintenance and more employees to run than a gas plant. This makes it particularly expensive to run a coal plant if it's only needed during peak demand seasons. As far as I can tell, Spiritwood Industrial Park was the last coal plant successfully completed in the continental US, in 2014: https://www.gem.wiki/Spiritwood_Industrial_Park It started construction in 2007. As of this year, it is already slated for conversion to natural gas. I don't expect another coal plant to be built in the continental US, even if gas prices rebound. |