Electricity

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Electricity Monthly Update

With Data for May 2015  |  Release Date: July 27, 2015  |  Next Release Date: August 25, 2015

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Resource Use: May 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 0.7% compared to May 2014. At the regional level, the Central and West regions saw net generation decrease by 2.6% and 7.7%, respectively, as both of these regions experienced cooler temperatures in May 2015 compared to the previous May, leading to a decreased need for electricity demand. All other parts of the country saw an increase in net generation, except for Texas, which saw net generation stay relatively flat when compared to the previous year.

Electricity generation from coal decreased in all regions of the country, except for the West, where coal generation increased by 1.0%% compared to May 2014. Electricity generation from natural gas increased in all parts of the country, with the Mid-Atlantic and Northeast seeing the largest percent increases in natural gas generation. These two regions experienced large increases in natural gas generation due to significantly above average temperatures in May 2015, with Vermont, Massachusetts, Connecticut, and Rhode Island experiencing record temperatures during the month.

Fossil fuel consumption by region





map showing electricity regions

The chart above compares coal consumption in May 2014 and May 2015 by region and shows that changes in coal consumption for electricity generation were very similar to changes seen in electricity generation from coal.

The second tab compares natural gas consumption by region and shows that all regions of the country saw an increase in natural gas consumption.

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 May 2015, the share of natural gas consumption increased in all regions of the country at the expense of coal consumption 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 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 chart above. For the first time in five months, the monthly average price of natural gas at Henry Hub increased from the previous month, going from $2.67/MMBtu in April 2015 to $2.91/MMBtu in May 2015. The natural gas price for New York City (Transco Zone 6 NY) also increased from the previous month, going from $2.30/MMBtu in April 2015 to $2.67/MMBtu in May 2015.

The New York Harbor residual oil price decreased slightly from the previous month, going from $10.25/MMBtu in April 2015 to $10.18/MMBtu in May 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. For the fifth consecutive month, the price of natural gas at Henry Hub was below the price of Central Appalachian coal on a $/MWh basis. However, because of the month-to-month increase in the price of natural gas at Henry Hub, the spread between the two prices decreased significantly. The spread between the New York City gas price and the price of Central Appalachian coal also decreased compared to the previous month, with the New York City gas price still below the price of Central Appalachian coal, but by only $3.16/MWh.

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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