Coal Demand During the 1970?s For Electrical Power Generation

At almost no time since the end of World War I has the coal industry been free from serious threats to its competitive position. At present, the critical question is whether the industry can maintain its position in the electric power market and this paper reviews the prospects in this area. Our report is part of a study, supported by Resources for the Future Inc., dealing with coal demand in general. Like most elements of coal economics, it has received much less analysis than problems in other energy sectors--a defect we felt worth correcting. We have concentrated on electric power elements of the market. The nature of the coal market makes this the natural choice. Three markets absorb over 80 per cent of coal production and are considered in our overall work. The completely excluded sectors are largely catchall categories in which coal use is declining anyway. Comparing the three markets included in the overall study, we see: modest growth is the most optimistic forecast for metallurgical coke; export growth depends to a large extent on policies of foreign governments. Electric power use, however, has rapidly grown to absorb over half of coal output and coal's prospects depend almost entirely on continued expansion of this market. Throughout the 1960's the demand for coal used to generate electrical power in the United States grew at an average rate of 6.5 per cent annually. This growth rate will be sustained until at least 1976.