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Electricity Monthly Update

With Data for May 2016  |  Release Date: July 26, 2016  |  Next Release Date: August 24, 2016

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Resource Use: May 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 1.6% from the previous May. This occurred, in part, because the country, as a whole, experienced slightly higher temperatures last May than in May 2016, which led to a decreased need for residential cooling this year and thus, a decrease in electricity generation. At the regional-level, the only part of the country that saw a sizeable year-over-year increase in electricity generation was Texas, which saw total electricity generation increase 1.8% due to above average temperatures experienced this May in Texas compared to the previous year.

Electricity generation from coal decreased in all regions of the country except for the Northeast, where there is very little coal generation to begin with. Natural gas generation increased from the previous year in all parts of the country except for the West, which saw a 2.7% decrease compared to May 2015. This decrease in natural gas generation occurred because the West, and more specifically the Northwest part of the country, saw a large increase in hydroelectric generation in May 2016 due to melting snow from warmer spring temperatures.

Fossil fuel consumption by region





map showing electricity regions

The chart above compares coal consumption in May 2015 and May 2016 by region and shows that the change in coal consumption mirrored the change in electricity generation from coal.

The second tab compares natural gas consumption by region and shows that changes in natural gas consumption from the previous May 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 May 2016, the share of natural gas consumption increased in almost all regions of the country at the expense of coal consumption compared to the previous year. The only outlier was in the Northeast, where the very small share of coal consumption increased slightly at the expense of natural gas compared to the previous May.

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 going from $1.96/MMBtu in April 2016 to $1.97/MMBtu in May 2016. The natural gas price for New York City (Transco Zone 6 NY) remained unchanged from the previous month, and was $1.61/MMBtu in both April and May 2016.

The New York Harbor residual oil price increased from the previous month, going from $5.69/MMBtu in April 2016 to $7.02/MMBtu in May 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 seventeenth 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 decreased in May 2016, mainly due to the decrease in the price of Central Appalachian coal. The price of natural gas at New York City on a $/MWh basis was below the price of Central Appalachian coal for a third consecutive month, and the spread between the two prices decreased due to the decrease in the price of Central Appalachian coal.

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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