Mine-mouth coal prices

The prices of natural gas or an alternate light hydrocarbon reformer feed, resid, and electricity are assumed to apply to all geographical locations in the U. S. However, delivered-coal prices vary from one geographical location to another. Mine-mouth coal prices are affected by mining costs and coal quality. Transportation costs for moving the coal to manufacturing sites have been assumed to be proportional to the transportation distance. 

Coal prices delivered to manufacturing sites on the East Coast, the Mid-Continent (Illinois), the Gulf Coast, and the West Coast were estimated and the transportation cost in unit trains was added to the estimated mine-mouth coal prices to provide estimated prices of coal delivered to the manufacturing sites as are shown in Table 9. 

Likewise, both sources are optimistic about coal prices. The DOE expects that continued increases in mine productivity and the shift to low-cost coal from the Powder River Basin in Wyoming will lead to a gradual decline in mine mouth coal costs to approximately 20 per ton in 2020. 

Wliile some problems still exist, there is no question that coal mining operations are more efficient and safer for workers and leave less of an environmental footprint than operations several generations ago. As society s demand for energy from coal continues to increase and as coal s price declines (between 1978 and 1996 U.S. mine mouth prices fell from 47,118 to 18..S11 per ton in constant 1996 dollars), there is certain to be even gi eater efforts to limit the environmental impact of mining operations. 

Most additional cost imposed by regulatory requirements is reflected in coal price, both at the mine mouth and at the point of use. Coal is in competition with other fuels in all its markets increases in the cost of using coal will reduce the incentive for increased coal uses and hence the use of coal."... 

A delivered coal price of 12.85/tonne and a mine mouth price of 5.45/tonne were used in the analysis. Both prices are based on 1997 average coal prices in the state of Wyoming2. 

A discounted cash-flow analysis of the system was made using conservative financing assumptions. These included 100% equity, 12% return on investment, and a plant life of 20 years plus a construction time of five years. Strip-mined western coal was priced conservatively at 15 per ton. This is a reasonable price, for example, for coal delivered from Gillette, Wyoming by unit train to a plant serving the Chicago area (mid-1977 prices) alternatively, a mine-mouth plant site would obtain coal at lower prices, but product transportation costs would be higher. 

US coal prices have increased somewhat due to rising transportation costs (Figure 2.6). However, the overall trend in coal prices as measured at the mine (mine mouth) is downward as coal producers continue to find ways to increase the productivity of the average mine. The average delivered price for utilities increased just 5.7% during 2004 (EIA 2004), but 13.2% for industrial users. The widespread use of futures contracts in the coal industry has helped to keep prices stable. The overall stability of coal prices likely also will lead to a renewed interest in coal by utility officials and others, who until recently, believed natural gas was the fuel of the future. Anecdotal evidence purports an increase in coal use at the residential level. Homeowners with access to delivered coal found it is possible to heat less expensively with coal than natural gas or oil in the 2005-2006 heating season (Kamery 2006). 

It can generally be stated that nuclear power plants in the power range above 900 MW(e) are well competitive worldwide with oil-fired plants at current prices. They are also competitive with coal-fired plants except possibly at mine-mouth locations, especially in the USA. 

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