Environmentalists have been wishing that coal would go away for many years. The recent surge in natural gas supply from the shale gas production is the force proving the economic law of substitution. Much like the 50’s and 60′ when many residential homes converted from coal to natural gas heating the electric generators are doing the same thing.
US power prices to remain low until generators burn more gas: analyst
Houston (Platts)
US wholesale electricity prices are in a “trough” and could stay there until the “structural oversupply” of natural gas is mopped up by more generators switching to gas from coal, Macquarie Equities Research said Tuesday.
Power prices are down because of unseasonably warm weather and low gas prices, the report said. “We find little upside to long-term gas fundamentals in the US,” Macquarie said, adding that coal prices are also moving lower under pressure from gas prices.
Over the long-term, the report said power prices should strengthen when the economy improves and if and when the US Environmental Protection Agency’s Cross-State Air Pollution rule is reinstated. The US Circuit Court of Appeals for the District of Columbia halted implementation of the rule that would create a trading…