Coal vs. Natural and Why It Matters to Bioenergy

By Kolby Hoagland | May 24, 2013

Today’s Datapoints looks at an energy transition averted and how this transition affects the bioenergy industry. During April of last year, natural gas nearly overtook coal as the top fuel source in the domestic generation of electricity. Both fuels effectively tied, each accounting 32% of total U.S. electricity generation among all sources.  The chart below shows five years of U.S. electricity generation by energy source on a monthly basis. The burning of coal produced only 0.32% more electricity than natural gas for April of 2012. Since then, coal has rebounded as natural gas prices have grown.

Coal nearly became unseated for the first time in modern history as the leading primary fuel consumed for U.S. electricity production. Government policies around the world, including the U.S., are pushing for a transition away from coal to lower carbon energy sources. Energy transitions throughout history have been slow affairs. For example, the transition from sailboats dominating sea travel to coal powered steamships was a 100 year endeavor despite the availability of steam technology at the time. Current U.S. policy and international progress towards a low carbon economy is predicted to incur growth among lower carbon energy sources. Cleaned biogas and solid biomass (such as pellets or woodchips) drop in well to natural gas and coal fired generating systems. Biogas is cleaned to pipeline grade and solid biomass can easily be co-fired with coal.  As less coal or natural gas is consumed to produce electricity, generating capacity is made available for drop-in bioenergy sources.  

We often hear in our industry how “cheap coal” or “cheap natural gas” impedes our industry’s growth. We should, however, take note that the inverse relationship between natural gas and coal prices and their market share creates underutilized assets on our national grid that could consume biomass fuels. While our industry makes up less than 2% of the primary energy sources consumed for the domestic production of electricity, a pathway for market growth is laid out for us for producing bioenergy in historically fossil fired assets.


Gas vs. Coal Primary Fuel US Electricity Production

5 Responses

  1. Amir Ronen



    The U.S. biomass community is so busy talking about competition of biomass energy with coal and natural gas production. There has been very little mentioned on the markets outside the US. Many countries in Latin America and Asia don't have domestic fossil fuel resources and electricity production is very expensive for them. These are markets where properly implemented biomass energy production can be extremely competitive. For example, companies like Galiltec are taking note of that in Central America where in some countries expensive bunker fuel is still used as the main electricity source.

  2. Gary Karl Greene



    True. There are signs of transition to biomass in these communities as well. There was a recent announcement of Viaspace partnering with Agricorp in Nicaragua for a 12 MW power plant colocated with a Giant King Grass plantation. This model allows countries with good weather, but no natural fossil fuel supply to "grow there own energy". There is also a GKG plantation and biogas plant going up in USVI, St, Crouix. Price is king and outside the US biomass costs are already cheaper than imported fossil fuels and with world growth and carbon mandates, this process should accelerate quickly! Gewat article.

  3. Kolby Hoagland



    Your comments help influence what DataPoints will cover in future blogs. We appreciate your comments. I agree that market growth in other countries is a different and important part of the broad bioenergy transition and is worthy of note. Latin America and the Caribbean have reliability, fuel cost, and varying incentives motivating growth in bioenergy. Market scale in the US is undeniable. Displacing 1% of the coal and NG burned in US generation with biomass fuels would cause the current US biomass power industry to roughly double in size. You all would find about what's going on in Yorkshire, United Kingdom. Read about the massive Drax installation, 'Yorkshire's Game Changer,' in the current Biomass Magazine!

  4. Arturo Velez



    Yes, Price is king! So why not using a biomass source (prickly pear or Opuntia) that can be used to produce methane and generate electricity at a lower cost than coal? The cost per million BTU with Opuntia is only US$2 Besides, opuntia can be grown on marginal dryland and can be used as food, fodder and feedstock. One hectare of opuntia can yield up to ten times the ethanol-per-hectare of sugarcane in Brazil!!

  5. Shawn Johnson



    Arturo, can you share with us a link to an illustrative calculation for the US$2/MMBtu cost of biogas from Opuntia ?

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