U.S. Energy Information Administration - EIA - Independent Statistics and Analysis
Electricity Monthly Update
With Data for August 2016 | Release Date: Oct. 25, 2016 | Next Release Date: Nov. 23, 2016
Resource Use: August 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
Net generation in the United States increased 4.4% from the previous August. This occurred because the country, as a whole, experienced above average temperatures in August 2016 that were higher than the above average temperatures experienced in August 2015. This led to an increased need for residential cooling this year and thus, an increase in electricity generation. At the regional-level, only Texas and the Western region saw decreases in year-over-year electricity generation, as these areas experienced temperatures that were cooler than the previous August.
The change in electricity generation from coal compared to the previous August was mixed throughout the country. The Northeast, Mid-Atlantic, Southeast, Florida, and Texas saw increases in coal generation from the previous year, while the Central and Western regions 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 August 2016. As a whole, nuclear generation was down 1.2% compared to the previous August, with Florida experiencing the largest percent decrease (-24.6%) due to the forced outage of generator one at the Saint Lucie nuclear plant.
Fossil fuel consumption by region
The chart above compares coal consumption in August 2015 and August 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 (102.9%), where the consumption of coal for electricity generation is almost negligible. The two plants driving the increase in coal consumption in the Northeast were the Brayton Point and Somerset Operating Co LLC power plants. The largest decrease in coal consumption compared to the previous July occurred in the Western region (-4.1%).
The second tab compares natural gas consumption by region and shows that changes in natural gas consumption increased from the previous August in all parts of the country except for in Texas and the West. The largest percentage increase in natural gas consumption occurred in the Central (42.3%) and the Mid-Atlantic (35.4%) regions.
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 August 2016, the Central and Mid-Atlantic regions experienced the largest increases in the share of natural gas consumption at the expense of coal consumption. Only the Northeast and Texas saw coal consumption increase at the expense of natural gas compared to the previous year.
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 remained relatively unchanged from the previous month, only decreasing by $0.01/MMBtu from $2.89/MMBtu in July 2016 to $2.88/MMBtu in August 2016. The natural gas price for New York City (Transco Zone 6 NY) decreased, going from $2.23/MMBtu in July 2016 to $2.06/MMBtu in August 2016.
The New York Harbor residual oil price increased from the previous month, going from $7.59/MMBtu in July 2016 to $7.67/MMBtu in August 2016. Regardless, oil used as a fuel for electricity generation is almost always priced out of the market.
A fuel price comparison based on equivalent energy content ($/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 third 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 in previous months. The price of natural gas at New York City on a $/MWh basis was still below the price of Central Appalachian coal for a sixth consecutive month, with the spread between the two prices increasing due to the decrease 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.