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UPDATE 1-U.S. coal for power to sink below 1 bln tons -EIA

Tue Jun 9, 2009 10:32pm IST

(Adds details about demand cut from last month's forecast)

NEW YORK, June 9 (Reuters) - U.S. power plants will burn less than 1 billion tons of coal in 2009 for the first time since 2002 as the recession and low natural gas prices cut demand, the government's top energy forecasting agency said on Tuesday.

Power plants will burn about 994 million tons of coal in 2009, the Energy Information Administration said in its monthly outlook. Last year U.S. power plants burned more than 1.04 billion tons of coal, the EIA said.

"A decline in overall electricity generation, combined with projected increases from natural gas, nuclear and renewable (hydroelectric and wind) generation sources, are projected to lead to a 4.6-percent decline in coal consumption in the electric power sector this year," the EIA said.

That was a bigger decline than the EIA forecast just last month when it expected the coal burn to fall 2.3 percent compared to last year.

The EIA said coal demand for the power sector should rise in 2010 as the economy recovers, which means concerns about carbon dioxide emissions from coal could also rise. The EIA said U.S. power plants would burn about 1.01 billion tons of coal next year. (Reporting by Timothy Gardner; Editing by Christian Wiessner)

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