Resource Use: July 2023

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 increased slightly, up 0.4%, compared to July 2023. All areas of the country, except for the Central region, saw a year-over-year increase in electricity generation. This occurred because most parts of the country had a warmer July this year compared to last year, which led to an increased demand for residential cooling and thus, an increase in the demand for electricity. The Central region was the outlier compared to the rest of the country, seeing a 6.1% decrease in electricity generation compared to last July. This occurred because much of the region, particularly the north central part of the country, experienced below normal temperatures during July 2023. This reduced the need for residential cooling in the Central region and thus, decreased the demand for electricity in that part of the country.

Electricity generation from coal was down in most parts of the country compared to July 2023. Only the Southeast (up 9.5%) and Florida (up 15.4%) saw a year-over-year increase in coal generation. Almost all parts of the country saw an increase in electricity generation from natural gas, with the outlier being the Southeast, which saw a 7.4% decrease in natural gas generation compared to the previous July. Electricity generation from nuclear increased 1.5% compared to July 2023, with the Southeast region seeing the largest year-over-year percent increase (up 5.1%). This increase in Southeast nuclear generation occurred because the Grand Gulf nuclear plant was offline for maintenance during most of July 2022, but operated at full capacity during July 2023.

Fossil fuel consumption by region

The chart above compares coal consumption in July 2022 and July 2023 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. Most regions of the country saw their share of natural gas increase at the expense of coal, with only the Southeast and Florida seeing 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. For the second consecutive month, the average price of natural gas at Henry Hub increased from the previous month, going from $2.21/MMBtu in June 2023 to $2.62/MMBtu in July 2023. After six consecutive month-over-month decreases, the natural gas price for New York City (Transco Zone 6 NY) saw an increase in price from the previous month, going from $1.45/MMBtu in June 2023 to $1.68/MMBtu in July 2023. For the seventh consecutive month, the average spot price of Central Appalachian coal decreased from the previous month, going from $3.11/MMBtu in June 2023 to $2.74/MMBtu in July 2023.

The New York Harbor residual oil price saw an increase in price from the previous month, going from $11.43/MMBtu in June 2023 to $12.21/MMBtu in July 2023. Even with many parts of the country experiencing above average temperatures during July 2023, oil was still priced out of most electricity markets for baseload operations during the month.

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 ($20.98/MWh) saw an increase from the previous month ($17.74/MWh) but was still below the Central Appalachian coal price ($29.64/MWh) in July 2023. The price of natural gas at New York City ($13.49/MWh) increased from the previous month ($11.63/MWh) and was below the price of Central Appalachian coal ($29.64/MWh) during July 2023.

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.