Anglo American coal bidders down to three, say sources
The final bidders are down to Yancoal Australia, Stanmore Resources and Peabody Energy.
According to the latest stats from the Energy Information Administration (EIA), coal-fired power stations represented just 36% of US electricity in the first quarter of 2012 — a rapid decline from the 44.6% in the first quarter of 2011.
The decline is primarily as a result of utilities switching to cheap natural gas which is trading at multi-year lows.
In absolute terms the EIA expects electricity generation from coal to decline roughly 15% this year as generation from natural gas increases by about 24%.
But the power sector is very price sensitive – next year the independent research body forecasts electricity generation from coal will increase by about 4%, “as projected coal prices fall slightly while natural gas prices increase, allowing coal to regain some of its power generation share.”
While stricter environmental regulation is leading to plant closures the US has not stopped building coal-fired power plants.
Illinois’ Prairie State power station will go into production in December and the plant will supply electricity to 2.5 million households for at least the next 30 years.
What makes the $5 billion Prairie State plant economically feasible compared to natural gas is that it sits on top of a coal mine owned and operated by US energy giant Peabody.
Read more about Old king coal’s new crown jewel >>
