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Electricity Monthly Update

With Data for September 2021 Release Date: November 24, 2021 Next Release Date: December 23, 2021

Resource Use: September 2021

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



Net electricity generation in the United States in September 2021 increased by 4.4% compared to September 2020. This increase in electricity generation likely occurred because the country experienced much warmer temperatures this September compared to last year. This led to an increased need for residential cooling and thus an increased demand for electricity generation. At the regional-level, Florida and the Western region were the only areas of the country that saw a year-over-year decrease in electricity generation.

All parts of the country, except for Florida, saw an increase in electricity generation from coal compared to the previous year. The change in electricity generation from natural gas was more mixed, with the Northeast, Southeast, Florida, and Texas all seeing an increase in natural gas generation compared to September 2020, while the MidAtlantic, Central, and West all saw a decrease in natural gas generation.

Nuclear generation decreased by 1.9% from the previous year. Although, conventional hydroelectric electricity generation increased in most areas of the country, with only Texas and the West seeing an overall decrease, the large drop in hydroelectric generation in the West (-16.8%) helped drive down total hydroelectric generation by 3.8%. Electricity generation from other renewable sources was up in all parts of the country (21%), with the MidAtlantic region seeing the largest percent change (33.8%) compared to the previous September.

Fossil fuel consumption by region





The chart above compares coal consumption in September 2020 and September 2021 by region and the second tab compares natural gas consumption by region over the same period. Changes in coal and natural gas consumption were similar to their respective changes in coal and natural gas generation.

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. All regions of the country, except for Florida and Texas, saw their share of coal increase at the expense of natural gas.

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 spot 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 increased from the previous month, going from $4.15/MMBtu in August 2021 to $5.28/MMBtu in September 2021. The natural gas price for New York City (Transco Zone 6 NY) also saw an increase from the previous month, going from $3.96/MMBtu in August 2021 to $4.09/MMBtu in September 2021. The average price of Central Appalachian coal increased from the previous month, going from $2.69/MMBtu in August 2021 to $2.90/MMBtu in September 2021.

The New York Harbor residual oil price saw an increase in price from the previous month, going from $13.10/MMBtu in August 2021 to $14.22/MMBtu in September 2021. As is the case most months, oil was largely priced out of most electricity markets for baseload operations.

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 Henry Hub natural gas price ($42.26/MWh) saw an increase from the previous month (33.25/MWh) and remained above the Central Appalachian coal price ($31.36/MWh) in September 2021. The price of natural gas at New York City ($32.73/MWh) also saw an increase from the previous month ($31.71/MWh) and this caused it to remain above the price of Central Appalachian coal ($31.36/MWh) during September 2021.

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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