For American coal, 2019 was bad, 2020 will be worse, and in 2021, renewables will surpass coal in electricity generation for the first time ever, according to the U.S. Energy Information Administration.
EIA’s latest short-term energy outlook yesterday showcased U.S. coal companies’ dire predicament: Coal-fired power plants keep closing, and exports will no longer help fill the void.
Trends in the coal industry have defied President Trump’s promises and his administration’s regulatory attempts to save the industry.
After a precipitous global decline, coal production stabilized early in Trump administration due to volatile markets abroad and rejuvenated exports. But mining slowed in 2019, and in 2020, EIA expects production to dip to under 600 million tons for first time since 1973.
If the predictions prove true, coal production will have dropped 18% during Trump’s first term.
The White House has been unable to stop the cresting wave of power plant retirements nationwide.
More than 90% of U.S. coal continues to go to electricity generation. But by 2021, coal consumption will have dropped by one-quarter. Coal will be used to generate just 21% of American electricity — half what it was a decade ago.
EIA expects natural gas, the primary driver of coal’s decline, to hold steady in the coming years, while wind and solar power make big gains.
By 2021, renewables will surpass coal and produce 24% of U.S. electricity.
Exports helped coal companies make up for lost power plants in past years, but no longer, according to EIA. Exports fell 20% in 2019 and are expected to drop again in 2020.
"If it can’t move internationally, into the export market, there’s not going to be home for it domestically," S&P Global Platts coal analyst Joe Aldina said.
Aldina pointed to an oversupplied market and steep declines in European demand for U.S. coal.
In 2019, 36% of U.S. coal exports went to Germany, Portugal and other nations in the European Union taking concerted steps to cut greenhouse gas emissions.
Despite that, Aldina said U.S. coal companies will continue to ship coal to growing markets in Asia. In 2019, India became the largest single importer of U.S. coal.
EIA expects exports to stabilize around 83 million tons in 2021.