Coal and Natural Gas Trends for Electricity Generation

Introduction

Fig. 1: U.S. annual consumption trends of coal and nNatural gas for electricity, [1] (Image Source: B. Janey)

Natural gas and coal remain highly prominent fossil fuels used worldwide for electricity production. The two energy sources, however, exhibit distinct differences in terms of their consumption trends, cost, and emissions, particularly with carbon dioxide (CO₂) emissions. This article offers a comparison between the two sources, with a specific focus on U.S. consumption patterns, costs, and related CO₂ emissions for electricity generation.

Consumption Trends

In 2023, the U.S. consumed approximately 32,506 billion cubic feet (or 920.5 billion cubic meters) of natural gas, positioning itself as the world's largest consumer of natural gas. Over time, natural gas consumption has experienced steady growth, largely due to its lower cost and lower emissions profile when compared to coal. In contrast, U.S. coal consumption has experienced a significant decrease, plummeting more than 50% since 2007, with only 426 million short tons consumed in 2023 (more than 60% for electricity generation). Note that these consumption figures include usage across various sectors, not solely electrical energy generation. Fig. 1 illustrates U.S. coal and natural gas consumption specifically for electricity generation. Coal remains a critical energy source globally, but its use has plateaued as countries increasingly transition to alternatives. [2]

CO₂ Emissions

Coal releases substantially more CO₂ per unit of energy than natural gas. In 2023, coal-fired electricity production in the United States resulted in 694 million metric tons of CO₂ emissions, though coal contributed merely 16% to the country's total electricity output. Natural gas, which is responsible for generating over 43% of U.S. electricity, accounted for about 705 million metric tons of CO₂ emissions. Both fuel sources emitted roughly the same amount of CO₂ in 2023, yet natural gas produced much more electricity. [1] As shown in the calculations below, coal theoretically emits 2.53 times more CO₂ than natural gas. This means that coal theoretically generates around 126.5 kg of CO₂ per GJ and 50.0 kg of CO₂ per GJ for natural gas.

Calculated based on the fuels' energy density and carbon contents.

Costs

Coincidentally, the cost of natural gas in U.S. dollars per GJ from 2007 to June 2024 has decreased by roughly 65%. Per the cost calculations estimated by the U.S. Energy Information Administration, the cost of coal and natural gas for electrical generation for June 2024 is $2.39/GJ and $2.55/GJ respectively. [1] These figures are merely for purchases of fuel by energy plants. When evaluating fuel efficiency for coal and natural gas-fired electrical generation plants, natural gas is much more efficient at producing electricity with an operating heat rate of 8.15 × 10⁶ J kwh^-1 compared to 1.13 × 10⁷ J kWh^-1 for coal-fired plants. [3] The operating heat rate is the inverse of the respective plants' thermodynamic efficiency and thus the efficiency for the average natural gas-fired plant in 2023 was 44% compared to that of 32% of a coal-fired plant. Accounting for this, natural gas and coal costs for electrical generation are 2.08 cents kWh^-1 and 2.70 cents kWh^-1 respectively. Coupled with the potential for further incurred costs associated with higher CO₂ emissions, natural gas is cheaper for electricity generation than coal.

Future Outlook

The U.S. is expected to continue reducing coal usage in favor of natural gas and renewable energy sources. As natural gas-fired plants continue to increase efficiency while simultaneously becoming much cheaper, natural gas usage is expected to grow. Around the world, many developed nations exhibit a similar trend. However, coal remains a key energy resource in countries like China and India due to its low cost and availability. [2]

Conclusion

Natural gas is replacing coal as a preferred electrical generation source in the U.S. primarily due to its lower associated costs and lower CO₂ emissions. While coal still plays a role, especially in developing countries, there seems to be a global shift towards cleaner energy solutions making natural gas a crucial bridge fuel before larger-scale renewable energy sources become viable.

© Benjamin Janey. The author warrants that the work is the author's own and that Stanford University provided no input other than typesetting and referencing guidelines. The author grants permission to copy, distribute and display this work in unaltered form, with attribution to the author, for noncommercial purposes only. All other rights, including commercial rights, are reserved to the author.

References

[1] "Monthly Energy Review, September 2024," U.S. Energy Information Administration, DOE/EIA-0035(2024/9), September 2024.

[2] "BP Statistical Review of World Energy 2022," British Petroleum, June 2022.

[3] "Electric Power Annual 2023," U.S. Energy Information Administration, October 2024.