| | | Data Drill
US coal prices have plunged from their record highs of last year, putting the focus back on the industry’s long-term decline.
Central Appalachia coal prices averaged $85 a short tonne yesterday, down nearly 60 per cent from their record highs in September, according to Platts of S&P Global Commodity Insights. Prices for Illinois Basin coal prices are also down 60 per cent from their summer peak, according to the US Energy Information Administration.
The rapid deflation comes amid falling gas prices, milder winter temperatures curbing fuel demand, and increased competition with renewables. US coal prices surged last year as Europe’s scramble to move away from Russian gas and a scorching summer added pressure to domestic supply.
“Now that winter is over and European ports are well-stocked with coal, global prices have dropped significantly. This has in turn put downward pressure on US domestic spot coal prices,” said Morgan Snook, associate pricing editor of coal at S&P Global Commodity Insights. The analytics firm expects 21GW of coal plants to retire in the US this year alone.
With falling demand and more plant retirements, analysts don’t expect a similar resurgence in coal prices.
A report released this week by the Institute for Energy Economics and Financial Analysis found that the US is transitioning away from coal faster than expected. The IEEFA expects the US to close half of its coal generation capacity by 2026, the earliest date since it began tracking closures.
Earlier this week, President Joe Biden announced $450mn in funding for clean energy projects located in former or current coal mines as part of the administration’s effort to include coal country in the energy transition. The Treasury also released guidance on how these projects can receive a bonus tax credit in the Inflation Reduction Act. (Amanda Chu)
via FT Energy Source 4/6/23 |
|
