Energy forecasters say 2018 will go down as the year of the lowest level of U.S. coal consumption in nearly four decades as the electric power sector turns to natural gas and more renewable resources for generation.

The Energy Information Administration projected U.S. coal use to drop to 691 million short tons at the end of 2018—down 4 percent from 2017 and on par with levels last seen in 1979.

Coal consumption in 2018 plummeted 44 percent compared to 2007, the peak year for coal use, EIA said in its Dec. 28 analysis.

The electric power sector consumed 93 percent of domestic coal between 2007 and 2018, according to EIA, making the industry a key driver in coal intake.

"The decline in coal consumption since 2007 is the result of both the retirements of coal-fired power plants and the decreases in the capacity factors, or utilization, of coal plants as increased competition from natural gas and renewable sources have reduced coal's market share," EIA said.

Coal-based electric generation nationwide peaked at 313 gigawatts across 1,470 generators in 2007. Of the current 258 GW of coal-based capacity online, about 14 GW were to shut down by the end of year, which would make 2018 the second-highest year for coal retirements, EIA said. Generators plan to retire another 4 GW by the end of 2019.

EIA pointed to the price of coal compared to natural gas as a key factor.

"Natural gas prices have stayed relatively low since domestic natural gas production began to grow in 2007. This period of sustained, low natural gas prices has kept the cost of generating electricity with natural gas competitive with generation from coal," EIA said.

Other influences cited by EIA for the decrease of coal generation:

  • Rising retirements of elderly coal power plants.

  • Changes in regional electricity demand.

  • Increased competition from renewables.

  • Environmental concerns.

EIA notes that coal retirements were at an all-time high in 2015 when the Environmental Protection Agency's Mercury and Air Toxics Standards (MATS) rule took effect, requiring coal and natural gas power plants to control their emissions.