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EIA: Gas Trounced Coal in March

While net power generation output was down overall in March, gas-fired plants trounced their coal-fired peers as weak gas prices continued to favor the cleaner fuel, according to the Energy Information Administration (EIA).

The drop in coal-fired generation was the largest absolute fuel-specific decline from March 2008 to March 2009 as it fell by 24,656 thousand MWh, or 15.3%, according to EIA's Electric Power Monthly. Gas prices have been generally trending downward since June 2008, and the March 2009 gas price for the sector was 48.4% lower than it was in March 2008, EIA said. Gas-fired generation saw the largest absolute fuel-specific increase in March 2009 as it was up by 6,430 thousand MWh, or 10.4% from March 2008.

Year-to-date, net generation was down 4.6% from 2008. Net generation attributable to coal-fired plants was down 11.7%. Nuclear generation was up by 2%. Generation from petroleum liquids was up by 21.7%, while gas-fired generation was up by 1% year-to-date. A 38.5% jump in wind generation in March contributed to a year-to-date increase of 34.9%.

Consumption of coal for power generation in March was down by 13.1% compared to March 2008. Consumption of gas increased by 9.1%, EIA said.

In March the price of coal to generators increased slightly from the previous month, while the cost of petroleum and natural gas decreased. The average price paid for coal in March was $2.29/MMBtu, up 0.4% from the price paid in February. It was 18.7% higher when compared with the March 2008 price of $1.93/MMBtu. The average price paid for gas by generators in March was $4.69/MMBtu, an 11.8% decrease from the February 2009 level of $5.32 and a 48.9% decrease from March 2008.

The economy continued to batter the U.S. power industry in March as net generation output marked its eighth consecutive month of year-over-year declines, dropping 4.3% from March 2008. Gross domestic product (GDP) decreased from the fourth quarter of 2008 to the first quarter of 2009, according to the Commerce Department, and industrial production in March 2009, as reported by the Federal Reserve, was 12.8% lower than it had been in March 2008, the ninth consecutive monthly year-over-year decline, EIA noted.

The decline in net generation is also consistent with the National Oceanic and Atmospheric Administration's population-weighted Residential Energy Demand Temperature Index (REDTI) for March 2009, which was 3.7% "below average consumption." In March 2008 the REDTI was "near average." EIA said.

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