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Electricity Monthly Update

With Data for February 2016  |  Release Date: April 28, 2016  |  Next Release Date: May 25, 2016

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Resource Use: February 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 February 2016, net generation in the United States decreased 6.4% from the previous year. This occurred because the country experienced extremely warm temperatures in February 2016, leading to a decreased demand for electricity generation used for residential heating. At the regional-level, only the West saw a noticeable increase in electricity generation (1.2%) compared to last February, caused by the record warm temperatures experienced last February. During this February, the West experienced temperatures that led to a slight uptick in heating demand compared to the previous year and thus, the region observed a slight increase in electricity generation.

Electricity generation from coal continued the trend of year-over-year decreases in all regions of the country. For the second consecutive month, natural gas generation increased in all regions of the country, except for in Texas, where electricity generation decreased due a decline in residential heating due to weather conditions. Nuclear generation increased 3.4% compared to February 2015, with all regions of the country seeing a year-over-year increase in nuclear generation. Electricity generation from other renewables saw an increase in all regions of the country, with the largest percentage increase occurring in Texas (54.3%) due to many new wind farms coming online since last year.

Fossil fuel consumption by region





map showing electricity regions

The chart above compares coal consumption in February 2015 and February 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 increases in natural gas consumption from the previous February mirrored the increases in electricity generation from natural gas over the same period, including Texas, where natural gas consumption decreased compared to the prior February.

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 February 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. In the Northeast, natural gas also increased its share at the expense of other fossil fuels, which saw a larger than usual share of fuel consumption during the previous February.

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 $2.35/MMBtu in January 2016 to $2.00/MMBtu in February 2016. The natural gas price for New York City (Transco Zone 6 NY) also decreased from the previous month, going from $3.76/MMBtu in January 2016 to $3.00/MMBtu in February 2016.

After three consecutive month-over-month decreases, the New York Harbor residual oil price increased from the previous month, going from $5.14/MMBtu in January 2016 to $5.28/MMBtu in February 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 fourteenth 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 in February 2016, mainly due to the decrease in the price of natural gas at Henry Hub. The price of natural gas at New York City on a $/MWh basis was above the price of Central Appalachian coal for the second consecutive month, however, the spread between the two prices decreased 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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