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Electricity Monthly Update

With Data for March 2016  |  Release Date: May 25, 2016  |  Next Release Date: June 23, 2016

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Resource Use: March 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 decreased 6.4% from the previous March. This occurred because the country experienced extremely warm temperatures in March 2016. These warmer temperatures significantly suppressed heating demand compared to the previous March and thus, there was a corresponding decrease in electricity generation. At the regional-level, all parts of the country saw a decrease in electricity generation, with the MidAtlantic seeing the largest percent decrease of 10.8% compared to March 2015.

Electricity generation from coal continued the trend of year-over-year decreases in all regions of the country. However, unlike in previous months, the change in natural gas generation from the previous year was more mixed. The Northeast, Florida, Texas, and the West all saw year-over-year decreases in natural gas generation, whereas the MidAtlantic, Southeast, and Central regions all observed increases in natural gas generation compared to the previous March. Most regions of the country, except for the Northeast and Florida, saw an increase in other renewables generation. Texas saw the largest percent increase (127.8%) in other renewables generation, mainly due to an increase in wind generator capacity compared to the previous year.

Fossil fuel consumption by region





map showing electricity regions

The chart above compares coal consumption in March 2015 and March 2016 by region and shows that, like electricity generation from coal, coal consumption decreased in all regions of the country.

The second tab compares natural gas consumption by region and shows that changes in natural gas consumption from the previous March were similar to the changes in electricity generation from natural gas over the same period.

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 March 2016, 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 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 decreased from the previous month, going from $2.00/MMBtu in February 2016 to $1.76/MMBtu in March 2016. The natural gas price for New York City (Transco Zone 6 NY) also decreased from the previous month, going from $3.00/MMBtu in February 2016 to $1.36/MMBtu in March 2016.

The New York Harbor residual oil price increased slightly from the previous month, going from $5.28/MMBtu in February 2016 to $5.35/MMBtu in March 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 fifteenth consecutive month, the price of natural gas at Henry Hub was below the price of Central Appalachian coal on a $/MWh basis. The spread between the two prices increased significantly in March 2016, mainly due to the large decrease in the price of natural gas at Henry Hub. The price of natural gas at New York City on a $/MWh basis was below the price of Central Appalachian coal for the first time in three months, with the spread between the two prices increasing significantly 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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