MISO warns of potential winter capacity shortfalls, tight US coal supplies
Midcontinent Independent System Operator is warning that it could face capacity shortfalls in January if there is high demand and high generation outages, while also raising concerns that generators across the Eastern US could have a hard time getting coal this winter.
High gas prices are pushing coal plants to run more often, and some power plants are struggling to maintain their coal inventories heading into winter. Tight coal supplies and increased coal prices will be felt particularly in MISO, which is the country’s largest coal-burning region.
But it is not just MISO, the entire eastern interconnection is starting to talk about coal availability, J.T. Smith, senior director of MISO operations, said Oct. 26 at MISO’s winter readiness workshop. “It is starting to be a concern and I think folks are starting to take action on that,” Smith said.
Coal constraints
Pre-winter coal inventories in the US are roughly 30% lower this season compared to last, according to stockpile estimates by S&P Global Platts Analytics. MISO primarily burns Powder River Basin coal, which hit a 20-year record high price on Oct. 26.
“Producers have talked to buyers and yes there is coal for them under RFPs to some extent but we’re seeing a little higher push than we usually do,” Daniel Vaughn, principal at Coaldesk, said of the spot coal market. “I’m not sure there’s enough coal. I don’t want to sound doom and gloom but it is tight.”
S&P Global Platts on Oct. 27 assessed December-delivered PRB 8,800 Btu/lb coal at $35/st, based on an indication of value at $33/st, matching the Oct. 26 record for the highest price since the assessment began Jan. 5, 2001.
“There’s essentially no coal in the Eastern market and very limited high heat coal in the PRB market, so where do you draw the line?” Vaughn said. When asked if US spot coal supplies were likely to improve in November, he said, “Oh no. It won’t look better until January of 2023.”
