High Henry Hub prices dent US gas-to-power demand

By Abhishek Kumar 19 April 2017
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Henry Hub prices remain high on an annual basis, denting demand for gas from the power sector in the United States. The situation is expected to persist over the coming weeks. Meanwhile, the widening of the gas-coal price spread means coal is becoming more appealing to US utilities. President Donald Trump’s support for coal will also favour greater use of the fuel in the country’s power sector.

The US power sector is expected to consume more coal even though its coal-powered fleet is ageing and a significant proportion of the plants use high-sulphur coal. Almost 88% of US coal-fired capacity was built between 1950 and 1990, and the capacity-weighted average age of US coal power plants is around 39 years. In 2016, almost half of the country’s coal plants used bituminous coal, which has a high sulphur content, while the other half used sub-bituminous coal, which has a lower sulphur content.

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