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Electricity Monthly Update

With Data for September 2016  |  Release Date: Nov. 29, 2016  |  Next Release Date: Dec. 23, 2016

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Resource Use: September 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

Net generation in the United States increased by only 0.4% from the previous September. This occurred because the country, as a whole, experienced above average temperatures that were very similar to the above average temperatures experience last year. At the regional-level, the MidAtlantic, Southeast, Florida, and Texas, all saw increases in electricity generation compared to September 2015, while the Northeast, Central, and Western regions all saw decreases in electricity generation.

The change in electricity generation from coal compared to the previous September was mixed throughout the country. The Northeast, Southeast, and Texas all saw increases in coal generation from the previous year, with the largest percent increase occurring in the Northeast (23.2%), where coal is used very sparingly as a fuel to generate electricity. One of the primary reasons for this increased coal generation in the Northeast was the large year-over-year increase in coal generation that occurred at the Bridgeport Station coal plant in Connecticut. However, it should be noted that Bridgeport Station is trying to transition operations so that natural gas can be used at the plant to generate electricity. Conversely, the MidAtlantic, Central, Florida, and the West regions saw a decrease in coal generation, with the Central region seeing the largest percent decrease (-9.1%) in coal generation.

The change in natural gas generation was also mixed throughout the country, with the MidAtlantic, Central, Southeast, and Florida all observing increases in natural gas generation compared to last year, while the Northeast, Texas, and the West regions all saw decreases in natural gas generation. As a whole, nuclear generation was down 1.6% compared to the previous September, while renewables generation was up 14.8% compared to last year.

Fossil fuel consumption by region

map showing electricity regions

The chart above compares coal consumption in September 2015 and September 2016 by region and the second tab compares natural gas consumption by region. Changes in coal and natural gas consumption closely mirrored the change in natural gas 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. In September 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, Texas, and West 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 increased from the previous month, going from $2.88/MMBtu in August 2016 to $3.05/MMBtu in September 2016. The natural gas price for New York City (Transco Zone 6 NY) decreased significantly from the previous month, going from $2.06/MMBtu in August 2016 to $1.33/MMBtu in September 2016.

The New York Harbor residual oil price increased from the previous month, going from $7.67/MMBtu in August 2016 to $7.79/MMBtu in September 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 fourth 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 seventh 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.

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