U.S. Energy Information Administration - EIA - Independent Statistics and Analysis
Electricity Monthly Update
With Data for December 2016 | Release Date: Feb. 24, 2017 | Next Release Date: Mar. 24, 2017
Resource Use: December 2016
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 generation in the United States increased 6.4% from the previous December. The country, as a whole, experienced near average temperatures in December 2016. However, electricity generation increased from the previous year because last December was the warmest December on record. This led to significantly reduced demand for residential heating during December 2015 and as a result, electricity generation was greatly reduced last year.
Electricity generation from coal increased in all regions of the country compared to the previous year, while natural gas generation decreased in all parts of the country, except for the Northeast, which saw a modest 2.4% increase from the previous December. This increase in coal generation with a subsequent decrease in natural gas generation is mainly attributed to the large increase in natural gas prices that occurred in December 2016. This large increase in the price of natural gas coupled with greater demand for electricity generation during the month made the dispatch of coal-fired generation more economical than in previous months during 2016.
As a whole, nuclear generation was up 2.9% compared to the previous December, with only the Northeast and Western region seeing a decrease in nuclear generation. Texas experienced the largest percent increase in nuclear generation from the previous year (27.8%), as the South Texas nuclear plant was offline for a refueling outage during December 2015.
Fossil fuel consumption by region
The chart above compares coal consumption in December 2015 and December 2016 by region and the second tab compares natural gas consumption by region over the same period. Changes in coal and natural gas consumption closely mirrored 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. In December 2016, all regions of the country saw an increase in the share of coal consumption at the expense of natural gas consumption.
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 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 significantly from the previous month, going from $2.60/MMBtu in November 2016 to $3.70/MMBtu in December 2016. The natural gas price for New York City (Transco Zone 6 NY) also increased significantly from the previous month, going from $2.23/MMBtu in November 2016 to $4.53/MMBtu in December 2016.
The New York Harbor residual oil price saw an increase from the previous month, going from $8.01/MMBtu in November 2016 to $9.12/MMBtu in December 2016. Regardless, oil used as a fuel for electricity generation is almost always priced out of the market.
A fuel price comparison based on equivalent energy content ($/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 price of natural gas at Henry Hub was well above the price of Central Appalachian coal on a $/MWh basis in December 2016. This was due to the large increase in the price of natural gas at Henry Hub. For the first time since February 2016, the price of natural gas at New York City on a $/MWh basis was above the price of Central Appalachian coal, mainly due to the large increase in 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.