(Bloomberg) — As silent factories and deserted offices hobble demand for electricity worldwide, the biggest loser is coal.
In the U.S., coal’s share of power generation has dropped more than 5 percentage points since February on the nation’s biggest grid while output from natural gas plants and wind farms held steady. In Europe, it’s down 2 points. Even in China and India, where coal still dominates, it’s losing market share during the pandemic.
It comes down to cost. Coal power is more expensive than gas and renewables in many places and, hence, is the first fuel priced out of the market when demand falls. Its plunging use amid the lockdowns is a boon for efforts to fight climate change, hastening a shift that was already underway to weed out the dirtiest fossil fuel.
“It’s accelerating coal’s demise,” said Hannah Newstadt, a power market analyst for Genscape Inc. In the U.S., coal is now supplying just 14% of power on the grid serving 65 million people from Illinois to New Jersey. That’s down from almost 20% in February, according to a Bloomberg analysis of data from the grid operator, PJM Interconnection LLC. It’s the only major fuel to slump.
Coal miners are already feeling the pain. While output has been sliding for years, the decline has been exacerbated since states began shutting down wide swaths of their economies.
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