Financial Times: US example: Gas replaces coal as the favoured fuel

For more than a century, the coal plants of America’s Southern Company have been generating electricity for towns and businesses throughout the country’s south-east.

Coal, as in other regions, has dominated the energy landscape. Until today. Over the past few years coal’s share of Southern’s electricity mix has dropped sharply. Four years ago, it produced 70 per cent of its energy from coal. Last year, this had dropped to about 40 per cent, and this year, it is expected to fall to 35 per cent.

The newcomer providing competition is natural gas. Five years ago gas accounted for between 10-12 per cent of Southern’s energy. The company expects this to grow to 47 per cent in the future.

The reason for the switch is simple: US natural gas prices have touched 10-year lows. The discovery of shale gas – trapped in rocks thousands of feet under the ground – coupled with new extraction techniques have transformed the country’s gas production.  MORE