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Electricity Monthly Update

With Data for August 2014  |  Release Date: Oct. 24, 2014  |  Next Release Date: Nov. 24, 2014

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Resource Use: August 2014

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 August 2014, net generation in the United States was almost flat compared to the previous year, decreasing by only 0.1%. This coincides with the slight decrease of 1.7% in U.S. population-weighted cooling degree days compared to last August. At the region-level, changes in electricity generation were mixed. The Central, Southeast, and Florida saw a slight increase in electricity generation compared to August 2013, while the Northeast, MidAtlantic, West, and Texas saw slight decreases in electricity generation.

Compared to the previous August, the only regions that saw an increase in electricity generation from coal was Florida, Central, and the Southeast, with each seeing only small increases compared to last year. All other regions only saw slight decreases in electricity generation from coal, with the MidAtlantic seeing the largest percentage decrease. The change in electricity generation from natural gas was also mixed. The MidAtlantic, Southeast, Florida, and Texas saw increases in natural gas generation, while the Northeast, Central, and West saw slight decreases compared to the previous year.

Total electricity generation from nuclear in the U.S. was nearly flat compared to August 2013, decreasing by only 0.3%. For the third consecutive month, the Central region had the largest percentage increase in nuclear generation compared to the previous year. This occurred because the Fort Calhoun nuclear plant was offline in August 2013 (and Fort Calhoun nuclear plant had been offline since May 2011 due to damage caused by severe flooding). In August 2014, Fort Calhoun nuclear plant was operating at full capacity. Except for the Northeast, electricity generation from hydroelectric generators decreased in all regions of the country compared to August 2013.

Fossil fuel consumption by region





map showing electricity regions

The chart above shows that the change in total coal consumption mirrored the change in electricity generation from coal in each region.

The second tab compares natural gas consumption in August 2013 and August 2014 by region. This consumption pattern mostly mirrored the change in electricity generation from natural gas, with the Central region having the largest percentage change in natural gas consumption for the second consecutive month.

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. Coal increased its share of total fossil fuel consumption at the expense of natural gas in the Central and West regions. In the Northeast and MidAtlantic, natural gas increased its share of total fossil fuel consumption at the expense of coal. In the Southeast, Florida, and Texas, the shares of both coal and natural gas remained relatively flat compared to last August.

The fourth tab presents the change in coal and natural gas consumption on an energy content basis between August 2013 and August 2014 by region. Once again, 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. For the second consecutive month, the price of natural gas at Henry Hub decreased from the previous month, going from $4.14 / MMBtu in July 2014 to $4.01 / MMBtu in August 2014. The natural gas price for New York City (Transco Zone 6 NY) decreased for the seventh consecutive month, going from $2.73 / MMBtu in July 2014 to $2.50 / MMBtu in August 2014. Like many natural gas prices in the Northeast, the New York City natural gas price is now well below the price of natural gas at Henry Hub. This is mainly due to the growth of natural gas coming out of the Marcellus region and a slight increase in pipeline capacity to the Northeast.

The New York Harbor residual oil price decreased from the previous month, going from $17.78 / MMBtu in July 2014 to $16.89 / MMBtu in August 2014. 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. The spread between the Henry Hub natural gas price and the price of Central Appalachian coal on a $ / MWh basis remained nearly the same compared to last month. However, because of the continued decrease in the New York City natural gas price, the price of Central Appalachian coal on a $ / MWh basis continues to be higher than the New York City natural gas price.

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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