Electricity

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Electricity Monthly Update

With Data for July 2016  |  Release Date: Sep. 27, 2016  |  Next Release Date: Oct. 25, 2016

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Resource Use: July 2016

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

In July 2016, net generation in the United States increased 2.9% from the previous year. This occurred because the country, as a whole, experienced above average temperatures in July 2016 compared to last July when temperatures were average. This led to an increased need for residential cooling this year and thus, an increase in electricity generation. At the regional-level, all regions of the country saw an increase in electricity generation compared to July 2015.

The change in electricity generation from coal compared to the previous July was mixed throughout the country. The Northeast, MidAtlantic, Florida, and Texas all saw increases in coal generation from the previous year, while the Southeast, Central, and Western regions all saw a decrease in coal generation. Natural gas generation increased from the previous year in all parts of the country except for in Texas and the West. This decrease in both coal and natural gas generation in the West occurred because the region, and more specifically the Northwest part of the country, saw a large increase in hydroelectric generation in July 2016. Electricity generation from other renewables increased in all regions of the country except for Florida. Texas had the largest percentage increase in other renewables generation, up 36.3% from the previous July, mainly due to many new wind farms coming online since last year and also the addition of the OCI Alamo 5 LLC solar plant.

Fossil fuel consumption by region





map showing electricity regions

The chart above compares coal consumption in July 2015 and July 2016 by region and shows that the change in coal consumption mostly mirrored the change in electricity generation from coal. The largest percentage increase in coal consumption occurred in the Northeast (9.6%), where the consumption of coal for electricity generation is almost negligible. The largest decrease in coal consumption compared to the previous July occurred in the Central region (-7.8%).

The second tab compares natural gas consumption by region and shows that changes in natural gas consumption from the previous July were similar to the changes in electricity generation from natural gas over the same period. The largest percentage increase in natural gas consumption occurred in the MidAtlantic (25.6%) and the Central (25.1%) regions, while the West (-3.5%) had the largest percentage decrease compared to July 2015.

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. In July 2016, the share of natural gas consumption increased in almost all regions of the country at the expense of coal consumption compared to the previous year. The only outliers were in Texas and the Northeast, where coal consumption increased slightly at the expense of natural gas compared to the previous July.

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 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 average price of natural gas at Henry Hub increased from the previous month, going from $2.64/MMBtu in June 2016 to $2.89/MMBtu in July 2016. The natural gas price for New York City (Transco Zone 6 NY) also increased, going from $1.89/MMBtu in June 2016 to $2.23/MMBtu in July 2016.

For the first time since January 2016, the New York Harbor residual oil price decreased from the previous month, going from $7.67/MMBtu in June 2016 to $7.59/MMBtu in July 2016. 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. For the second consecutive month, the price of natural gas at Henry Hub was above the price of Central Appalachian coal on a $/MWh basis. This was mainly due to the increase in the price of natural gas at Henry Hub. The price of natural gas at New York City on a $/MWh basis was still below the price of Central Appalachian coal for a fifth consecutive month, however, the spread between the two prices decreased significantly due to the increase in the price of natural gas at New York City.

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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