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Electricity Monthly Update

With Data for October 2017  |  Release Date: Dec. 22, 2017  |  Next Release Date: Jan. 24, 2018

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Highlights: October 2017

  • Texas (ERCOT) and California (CAISO), both of which experienced hot weather at some point during the month, saw electricity demand peak at 62,253 MW, or 87% of its all-time maximum, and in California (CAISO), demand peaked at almost 39,251 MW, or 78% of its all-time maximum.
  • Wholesale electricity prices reached $137/MWh and natural gas prices hit $4.72/MMBtu in California as a late season heatwave hit the state.
  • Texas (ERCOT) wholesale electricity prices reached a new 12-month high of $83/MWh on October 12.

Key indicators

Natural gas and renewables continue trend of growth in the face of flat power generation in 2016

Natural gas-fired and renewable power generation continued their upward trends in 2016, although total power generation has remained static at about 4,100 terawatthours (TWh). According to 2016 final data recently released in EIA’s Electric Power Annual 2016, natural gas-fired electric generation increased by 3.4% to 1,378.3 TWh, non-hydroelectric renewables (wind, solar, biomass, and geothermal) increased by 15.7% to 341.6 TWh, and conventional hydroelectric power grew by 7.5% to 267.8 TWh.

Coal-fired electric generation fell by 8.4% to 1,239.1 TWh. Nuclear power generation expanded by 1.1% to 805.7 TWh. Electric generation shares for 2016 were: 33.8% for natural gas, 30.4% for coal, 19.8% for nuclear, 8.4% for non-hydro renewables, and 6.6% for conventional hydroelectric.

Source: U.S. Energy Information Administration, Form EIA-923, Power Plant Operations Report.

The changes in the 2016 generation mix are consistent with longer-term trends in the industry. Looking back over the past 10 years of data (2006–2016), several key trends emerge—namely, the static nature of total generation, the growth in natural gas-fired and non-hydro renewable generation, and the contraction in coal-fired generation.

Source: U.S. Energy Information Administration, Form EIA-923, Power Plant Operations Report.

Total U.S. power generation has changed very little during the 2006 to 2016 timeframe. The 2006 (4,064.7 TWh) and 2016 (4,076.8 TWh) levels are within 0.3% of each other. Power generation peaked in 2007 at 4,156.7 TWh and decreased to 3,950.3 TWh in the 2009 recession. Increased efficiency and the recent increased use of small-scale (rooftop) solar (not captured in the generation reported here) has helped utility-scale generation remain constant, even in the face of economic growth and increased end-use customers.

The residential customer base, for example, has expanded by 7% from 122.5 million customers in 2006 to 131.1 million customers in 2016, but annual energy use per residential customer has fallen by 2.4% from 11.04 MWh per year in 2006 to 10.77 MWh per year in 2016. Another factor keeping generation levels constant is increased net imports from Canada and Mexico (0.4% of total supply in 2006 versus 1.5% of total supply in 2016).

The most dramatic development in the generation fuel mix during the 2006 to 2016 timeframe is the confluence of coal-fired and natural gas-fired generation. In 2006, coal’s share, at 1,990.5 TWh, was 49% of total generation, while the natural gas share, at 816.4 TWh, was 20.1% of total generation. However, the steady increase in natural gas-fired generation, at the expense of coal-fired generation, eventually resulted in natural gas (1,378.3 TWh and 33.8% of total generation) surpassing coal-fired generation (1,239.1 TWh and 30.4% of total generation) in 2016. The other marked development was the growth of non-hydro renewables (wind, solar, biomass, and geothermal), which collectively moved from 96.5 TWh, or 2.4% of total generation in 2006, to 341.6 TWh, or 8.4% of total generation in 2016. Nuclear and conventional hydroelectric generation, meanwhile, have largely held steady during the 2006 to 2016 time period with nuclear power generation fluctuating between 19% and 20.2% of total generation and hydroelectric ranging from 6% to 7.8% of total generation.

Source: U.S. Energy Information Administration, Form EIA-923, Power Plant Operations Report.

Looking further at renewable electric generation reveals that gains from 2006 to 2016 were fueled by growth in wind and solar power generation. Wind generation expanded from 26.6 TWh in 2006 to 227.0 TWh in 2016, an increase of more than 700%. Solar generation, meanwhile, increased from 0.5 TWh to 36.1 TWh, a 7000% increase. Other renewables—hydroelectric, geothermal, and biomass generation—have remained steady during the 2006 to 2016 time period.

Looking briefly at preliminary September 2017 year-to-date (YTD) data, several of these trends appear to continue in 2017. Total September 2017 YTD generation (3,042.2 TWh) is 2.5% lower than the September 2016 YTD levels (3,121.4 TWh), indicating that total generation has not increased during this time period. Non-hydro renewables continue to grow in 2017, moving from 250.5 TWh for September 2016 YTD to 284.6 TWh for September 2017 YTD, an increase of 13.6%. The September 2016 to September 2017 YTD growth in non-hydro renewables was fueled by an 11.5% increase in wind generation (from 164.1 TWh in 2016 to 183.0 TWh in 2017) and a 51.1% increase in solar generation (from 27.7 TWh in 2016 to 41.8 TWh in 2017). Both natural gas (a 10.9% decrease) and coal (a 1.5% decrease) are lower for September 2017 YTD relative to 2016 levels, although natural gas-fired generation’s share (31.8% at 967.0 TWh) remains higher than that of coal-fired generation (30.2% at 919.8 TWh). Also of note, due to a solid water year through September 2017, September 2017 YTD hydroelectric generation is up 15% (240.5 TWh for September 2017 YTD versus 209.1 TWh for September 2016 YTD).

Principal Contributors:

Joy Liu

Paul McArdle

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