NGI The Weekly Gas Market Report / NGI All News Access

U.S. First: Natural Gas Equals Coal's Share of Generation

For the first time since the federal government has been keeping such statistics, natural gas in April had the same size slice of the national power generation pie as did coal, the U.S. Energy Information Administration (EIA) said last Wednesday.

Each fuel accounted for 32% of power generated in April, the first time such parity was reached by gas since the EIA began keeping statistics in 1973.

Natural gas use for power generation increased in all regions of the country, according to EIA's Monthly Electricity report, while the use of coal declined across the board. Both statistics are in comparison to totals for the two fuels region-by-region in 2011. When the statistics were first compiled coal represented more than 45% of power generated nationally and natural gas took a little more than an 18% share.

In general, mild temperatures produced a decline in overall power generation in April compared with the same month a year ago, and there was a wide gap between the cost of natural gas and coal on a megawatt-hour (MWh) basis. The EIA report, however, said the rise in gas use and decline in coal was not only because of price.

The EIA report said the average spot price of Henry Hub natural gas was $17.80/MWh in April, lower than the average spot price of Central Appalachian coal, which was $30.76/MWh. April marked the ninth straight month that the average spot price of Henry Hub gas was below that of Central Appalachian coal, measured on a megawatt hour cost basis.

Coal-natural gas competition to produce electricity is more complex than just the megawatt hour price comparison. "It involves delivered prices and emission costs, the terms of fuel supply contracts and the workings of fuel markets," EIA said. Citing weather patterns this past April, EIA said the United States had total net generation of 296.1 million MWh in April, a 2.3% decrease from the previous year.

The report also spent considerable space on the potential peak-demand challenges for power and gas in Southern California this summer due to the prolonged outage of the 2,200 MW San Onofre Nuclear Generating Station in north San Diego County. EIA said one of the mitigation measures taken has been to bring back on line two mothballed gas-fired generation units up the coast at Huntington Beach, which is expected to add to the increased gas-fired generation loads in the nation's most populous state.

©Copyright 2012 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.

ISSN © 2577-9877 | ISSN © 1532-1266
Comments powered by Disqus