The challenges facing the coal power market are no secret. In November of 2015, a large gathering of political leaders from around the world gathered to discuss steps to reduce pollution levels to limit their effects on climate change. In the United States, strict EPA emissions restrictions have caused many older, inefficient coal plants to be retired or converted to natural gas, while newer coal plants have been forced to invest significantly in emission-reduction technologies.
While the proclamations of “the death of coal” are still a bit farfetched, the coal-fired power generation industry needs to adapt to the new political and economic landscape. As natural gas emerges as a cost-effective and pollution-reducing source of energy, many coal-fired facilities are evaluating co-fired generation utilizing coal and natural gas.
Co-fired generation ensures that plants have a reliable fuel supply at times of need. If a problem arises with the delivery of one of the fuels, the plant has the ability to fire the other fuel without skipping a beat. But, there’s more to co-fired generation than simply fuel supply. As the glut of domestic gas supplies has grown in the United States, thanks to significant investments and successes in hydraulic fracturing, the price has made it economically beneficial to power generation facilities with natural gas. However, the price could fluctuate significantly in future years as political pressures on hydraulic fracturing and investments in natural gas export facilities could drive the price of natural gas out of the “sweet spot” and closer to Europe’s natural gas price, which is currently 3 times higher per million BTUs than it is here in the United States.
Maintaining flexibility is paramount for the health of any industry, and the power generation industry is not different. If co-fired generation is something your facility would like to explore, give us a call today!
