Gas-based power overtakes coal power in US, research finds

12 July 2015 (Last Updated July 12th, 2015 18:30)

Gas has overtaken coal as the fuel used for energy generation in the US in April this year, reveals a research conducted by SNL Energy.

Gas has overtaken coal as the fuel used for energy generation in the US in April this year, reveals a research conducted by SNL Energy.

It is the first time gas-based power has overtaken coal, which is likely to have been influenced by the falling prices of gas since last summer, reports The Financial Times.

The country generated 31% of power from natural gas when compared to 30% generated by coal.

Coal had always been the major contributor for power generation, and only once gas-generated power came close to coal-based power in 2012, when the prices for gas had been low.

"It is the first time gas-based power has overtaken coal."

This indicates mounting pressure on the mining industry by the rising shale gas, the research added.

According to UK-based research firm Wood Mackenzie spokesperson Brett Blankenship, the combination of cheap gas along with new environmental regulations including those on mercury and related pollution from coal-fired power facilities were detrimental to the coal industry.

Blankenship was quoted by the news publication as saying: "Low gas prices mean coal plants are running less, and when they run their margins are typically compressed.

"So companies find it difficult to make the investments needed to comply with regulations and keep those plants running."

US Energy Information Administration has predicted a downward trend for coal this year, with production likely to drop down by 7.5%.

Market shares and bond prices for the fuel have also dipped.

Reduction in the number of operating coal-fired plants in the US had, however, been gradual. While in 2009, there used to be 593 such facilities, the number had gone down to 518, with a generating capacity of 303GW.