Coal vs. Natural and Why It Matters to Bioenergy
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.