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Electricity Monthly Update

With Data for January 2015  |  Release Date: March 27, 2015  |  Next Release Date: April 24, 2015

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Resource Use: January 2015

Supply and fuel consumption

In this section, we look at the resources used to produce electricity. Generating units are chosen to run primarily on their operating costs, of which fuel costs account for the lion's share. Therefore, we present below, electricity generation output by fuel type and generator type. Since the generator/fuel mix of utilities varies significantly by region, we also present generation output by region.

Generation output by region



map showing electricity regions

Net generation in the United States decreased 4.4% compared to January 2014 as most of the country experienced warmer temperatures compared to last year, which led to a decreased demand for heating compared to last January. These warmer temperatures were evident in the 7.7% decrease in total U.S. population-weighted heating degree days compared to last January. At the regional level, the only region of the country that did not see a decrease in net generation due to the warmer temperatures, was Texas, where below average temperatures caused a slight increase in net generation compared to last year.

In January 2015, electricity generation from coal decreased in all parts of the country compared to last January. Natural gas generation increased in all parts of the country compared to last year, except for in the West, where a significant increase in hydroelectric generation displaced the need for natural gas generation. Electricity generation from other fossil fuels, mainly oil, was down compared to last January, particularly in the Mid-Atlantic, where temperatures were warmer than January 2014.

Fossil fuel consumption by region





map showing electricity regions

The chart above compares coal consumption in January 2014 and January 2015 by region and shows that coal consumption for electricity generation has decreased in all regions of the country.

The second tab compares natural gas consumption by region. All regions of the country saw an increase in natural gas consumption, except for the West, which saw a substantial decrease in natural gas consumption. This decrease in the West's natural gas consumption occurred because of the increased electricity generation coming from hydroelectric power plants in January 2015, thus displacing the need for natural gas consumption used for electricity generation.

The third tab presents the change in the relative share of fossil fuel consumption by fuel type on a percentage basis, calculated using equivalent energy content (Btu). This highlights changes in the relative market shares of coal, natural gas, and petroleum. The West was the only part of the country that saw a slight increase in coal consumption at the expense of natural gas. All other parts of the country saw an increase in natural gas at the expense of coal and in both the Northeast and Mid-Atlantic, natural gas also increased its share of fossil fuel consumption compared to other fossil fuels, which is mainly oil.

The fourth tab presents the change in coal and natural gas consumption on an energy content basis by region. The changes in total coal and natural gas consumption were very similar to the changes seen in total coal and natural gas net generation in each region.

Fossil fuel prices




To gain some insight into the changing pattern of consumption of fossil fuels over the past year, we look at relative monthly average fuel prices. A common way to compare fuel prices is on an equivalent $/MMBtu basis as shown in the chart above.

The monthly average price of natural gas at Henry Hub decreased from the previous month, going from $3.45/MMBtu in December 2014 to $3.06/MMBtu in January 2015. However, the natural gas price for New York City (Transco Zone 6 NY) saw an increase in price from the previous month, going from $3.31/MMBtu in December 2014 to $8.66/MMBtu in January 2015. This increase in New York City's natural gas price is often observed during this time of year when there is an increased demand for natural gas used for heating in an area of the country where the natural gas pipeline infrastructure is subject to significant congestion.

For the sixth consecutive month, the New York Harbor residual oil price decreased from the previous month, going from $11.36/MMBtu in December 2014 to $9.47/MMBtu in January 2015. Regardless, oil used as a fuel for electricity generation is almost always priced out of the market.

A fuel price comparison based on equivalent energy content ($/MMBtu) does not reflect differences in energy conversion efficiency (heat rate) among different types of generators. Gas-fired combined-cycle units tend to be more efficient than coal-fired steam units. The second tab shows coal and natural gas prices on an equivalent energy content and efficiency basis. The price of natural gas at Henry Hub is now below the price of Central Appalachian coal on a $/MWh basis. This occurred due to the significant decrease in the Henry Hub price compared to last month. However, the spread between the New York City gas price and the price of Central Appalachian coal increased considerably due to the significant increase in New York City's gas price from the previous month.

The conversion shown in this chart is done for illustrative purposes only. The competition between coal and natural gas to produce electricity is more complex. It involves delivered prices and emission costs, the terms of fuel supply contracts and the workings of fuel markets.

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