In the U.S., 22% more coal-fired generation is expected in 2021 than in 2020, according to the latest Short-Term Energy Outlook (STEO) from the U.S. Energy Information Administration (EIA). The U.S. electric power sector has been generating more electricity from coal-fired power plants this year as a result of significantly higher natural gas prices and relatively stable coal prices. This year will yield the first year-over-year increase in coal generation in the United States since 2014.

Between 2015 and 2020, the cost of natural gas delivered to electric generators remained relatively low and stable. This year, however, natural gas prices have been much higher than in recent years. The year-to-date delivered cost of natural gas to U.S. power plants has averaged $4.93 per million British thermal units (Btu), more than double last year’s price.

The overall decline in U.S. electricity demand in 2020 and record-low natural gas prices led coal plants to significantly reduce the percentage of time that they generated power. In 2020, the utilization rate (known as the capacity factor) of U.S. coal-fired generators averaged 40%. Before 2010, coal capacity factors routinely averaged 70% or more. This year’s higher natural gas prices have increased the average coal capacity factor to about 51%, which is almost the 2018 average.

For 2022, the EIA forecasts that U.S. coal-fired generation will decline about 5% in response to continuing retirements of generating capacity at coal power plants and slightly lower natural gas prices.