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Electricity Monthly Update

With Data for December 2021 Release Date: February 25, 2022 Next Release Date: March 24, 2022

Highlights: December 2021

  • On a dollar per megawatthour basis, the Central Appalachian Coal price ($42.76/MWh) was above both the Henry Hub ($30.64/MWh) and New York City ($29.85/MWh) natural gas prices for the first time since early summer 2021.

  • Bonneville Power Administration set a new 12-month daily high electricity demand on December 27, while Southern Company set a new 12-month daily low electricity demand on December 25.

  • Total U.S. coal stockpiles had a month-over-month increase of 2.5%, reaching 95 million tons in December 2021. However, these coal stockpiles still remain at a relatively low historical level.

Key indicators

Statewide average temperature ranks
Statewide precipitation ranks
Total net generation
Net generation by select fuel sources

About 18% of U.S. generating capacity can fuel switch, and much of this capacity is in Florida, New York, and New England

An electric generator’s ability to switch to other energy sources when one source becomes constrained or uneconomical can improve the reliability and resilience of the electric power supply. However, fuel switching also imposes additional expenses in the form of fuel inventory costs, ongoing maintenance costs, or potential capital investments to operationalize fuel switching capability. As of January 2021, electric generators reported about 200 gigawatts of capacity—or 18% of the total utility-scale fleet—as capable of fuel switching.

A generator that can fuel switch is a combustion system that can run on one fuel and then replace that fuel in its entirety with a substitute fuel. Fuel switching excludes the limited use of a secondary fuel for start-up or flame stabilization. The most common configuration involves switching between natural gas and petroleum liquids (132,000 megawatts [MW]), and a smaller quantity can switch between natural gas and coal (21,000 MW).

Fuel switching is more common in regions subject to natural gas delivery constraints. Florida, New York, and New England account for 30% of the total fuel switching capacity despite representing only 12% of total U.S. generating capacity. New England has limited delivery capability on interstate natural gas pipelines, and Florida sometimes experiences natural gas supply disruptions because of hurricanes and lacks readily available storage capacity.

Fuel switching capacity among natural gas-fired combined cycle generators

Source: U.S. Energy Information Administration, Annual Electric Generator Report.

In addition to regional factors, fuel switching also varies by generating technology. Natural gas-fired combined-cycle (NGCC) applications provide 34% of the total U.S. utility-scale power generation, the largest share of any generating technology. Nationally, 19% of NGCC generators can fuel switch. Florida, New York, and New England have significantly larger shares of fuel switching NGCC units than the national average. In Florida, NGCC units provide 69% of the state’s total generation, and about 56% of NGCC capacity can fuel switch. In New York and New England, NGCC units collectively represent 32% of the generation capacity and 39% of the regional generation. In New York, 41% of the NGCC capacity can fuel switch, while in New England this share is 28%.

Markets that use less natural gas also have much less fuel switching capacity. Although a significant component of fuel-switching capacity (51,579 MW), NGCC units are less likely to be used in a fuel-switching role, compared with natural gas combustion turbines or natural gas steam turbines, because NGCC units tend to be run at higher unit capacity levels and have significant fuel requirements.

Fuel switching capacity among natural gas-fired combustion turbine generators

Source: U.S. Energy Information Administration, Annual Electric Generator Report.

Other natural gas technologies show a similar regional concentration in terms of fuel switching. Simple-cycle natural gas-fired technologies have a smaller share of total generation, accounting for just over 3% of total U.S. generation. However, these applications provide important grid support during high demand periods. In Florida, 94% of the natural gas-fired combustion turbine capacity can fuel switch, and in New England and New York, this share is about 80%—far higher than the national average of 45% for this technology. Combustion turbines, like steam turbines, are more often used in fuel-switching roles than NGCC units, because combustion and steam turbines are a cost-effective method of meeting incremental load at periods of high demand or significant changes in relative fuel prices.

Fuel switching capacity among natural gas-fired steam turbine generators

Source: U.S. Energy Information Administration, Annual Electric Generator Report.

For steam turbine applications, the share of natural gas capacity that can fuel switch is also comparatively high in New England, Florida and New York, which reinforces the value of the ability to run generators on other fuels. In other markets, where natural gas capacity has a lower share of total generating capacity, the ability to fuel switch is less important, leading to less investment in and fewer expenditures devoted to the storage and handling systems for other fuels.