This year, U.S. coal has seen a big boost in domestic and export demand. Unlike LNG which needs liquefaction and re-gas, coal exports have less friction. As a result, the U.S. domestic coal prices are now at parity with international markets (adjusted for quality and transport cost). Domestically, utilities have delayed closure on more than 12 GW of coal-fired power plant capacity to ensure sufficient grid reliability.
The recent Supreme Court ruling in West Virginia v EPA limited the EPA’s ability to force existing coal plants to close. Forced closure of plants is not helpful for the energy transition. Maintaining flexibility during an energy shortage is crucial to maintaining reliability at an affordable cost. Having these plants available does not in itself generate carbon emissions but it does provide valuable insurance to a system learning how to use intermittent renewables.
Coal stirs a lot of emotions/ concerns but like it or not it’s part of the transition.