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Electricity Monthly Update

With Data for May 2018  |  Release Date: July 24, 2018  |  Next Release Date: August 24, 2018

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Resource Use: May 2018

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



map showing electricity regions

Net generation in the United States increased by 5.4% compared to May 2017. This increase in electricity generation occurred because the country, as a whole, experienced its warmest May on record during May 2018, while the country experienced average temperatures during May the previous year. This led to a greater need for residential customer cooling during May 2018 compared to the previous year, which increased the need for electricity generation compared to a year ago. At the regional-level, all parts of the country, except for Florida, experienced an increase in electricity generation compared to the previous May. This occurred because Florida was one of the few regions of the country that had a cooler May than the previous year.

All regions of the country saw a decrease in electricity generation from coal compared to the previous year. Texas saw the largest decrease in electricity from coal, down 2,395 GWh compared to last May. All regions of the country, except for Florida, saw an increase in electricity generation from natural gas compared to May 2017. The Central region saw the largest increase in natural gas generation, up 6,363 GWh compared to the previous year.

Nuclear generation increased 9.8% compared to May 2017. This increase occurred because there were numerous nuclear power plants offline for maintenance the previous May, most notably the Palisades nuclear plant in Michigan and the Waterford 3 nuclear plant in Louisiana. Most nuclear plants that were offline last year operated at full capacity this May 2018.

Fossil fuel consumption by region





map showing electricity regions

The chart above compares coal consumption in May 2017 and May 2018 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 May 2018, all regions of the country saw an increase in the share of natural gas at the expense of coal.

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 slightly from the previous month, going from $2.86/MMBtu in April 2018 to $2.89/MMBtu in May 2018. The natural gas price for New York City (Transco Zone 6 NY) decreased from the previous month, going from $2.81/MMBtu in April 2018 to $2.65/MMBtu in May 2018. For the second consecutive month, the average price of Central Appalachian coal saw a decrease from the previous month, going from $2.66/MMBtu in April 2018 to $2.61/MMBtu in May 2018.

The New York Harbor residual oil price saw an increase from the previous month, going from $11.38/MMBtu in April 2018 to $12.45/MMBtu in May 2018. Unlike the beginning of the year, oil used as a fuel for electricity generation was priced out of the market during this 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 price of natural gas at Henry Hub ($23.11/MWh) was below the price of Central Appalachian coal ($28.16/MWh) on a $/MWh basis, with the spread between the two decreasing slightly from the previous month. The price of natural gas at New York City ($21.23/MWh) was below the price of Central Appalachian coal ($28.16/MWh) during May 2018, mainly due to the drop in the price of natural gas at New York City from the previous month.

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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