US electricity consumption is rising so rapidly that coal usage could increase dramatically, said Bloomberg News citing comments by Peabody Energy Corp.
The surge in power demand, combined with US president Donald Trump’s support for the coal industry, means utilities may significantly increase output from coal plants currently operating well below capacity. This could generate more than 250 million tons (Mt) of additional annual demand, Peabody suggested during a Wednesday investor briefing.
However, industry experts remain sceptical about achieving such dramatic increases in practice.
Coal consumption in America has declined steadily as power companies move away from the most polluting fossil fuel. Yet this year’s expected consumption of 439Mt represents a 6.7% rise from last year, though still far below 2007’s peak of 1.13 billion tons.
“Peabody sees great untapped potential for existing US coal plants,” Mark Spurbeck, the St Louis-based company’s CFO was quoted by Bloomberg News as saying.
American electricity demand is projected to climb 25% by 2030, driven by manufacturing, home electrification, and particularly the rapid expansion of data centres supporting artificial intelligence systems. Meanwhile, supply chain problems have hampered efforts to build new natural gas plants, said the newswire.
This combination is forcing greater reliance on underutilised coal facilities. America’s coal fleet operated at just 42% capacity last year, compared with 72% in 2008.
Andy Blumenfeld from McCloskey by Opis described the 250Mt projection as “a theoretical maximum, if everything works perfectly. And they don’t.”
