Analysis: Cheap gas sidelines coal on Texas grid
Houston, 6 May (Argus) — Low natural gas prices and rising wind production could force older Texas coal-fired power plants into seasonal operation, making it tougher to justify expensive upgrades to comply with looming federal emission standards.
Coal-fired plants in the first quarter supplied just 26pc of the energy consumed by Texas’ primary grid, down from 39pc in 2014.
March’s coal output, at 5.6GWh, was nearly 40pc below the year-earlier figure and marked the lowest monthly output since before 2002 when the Electric Reliability Council of Texas (ERCOT) began compiling data.
Coal plants found it hard to compete economically against gas generation as spot prices at the Waha hub in west Texas have dropped significantly over the past year amid a surge in domestic production. Waha prices in April fell to an average of $2.41/mmBtu, down by 46pc from a year earlier.
