Driven by a sharp increase in natural gas prices, gas for electric generation dropped all over the nation, except in Florida, on a month-over-month basis in February compared to February 2012, according to the latest Electricity Monthly report from the Energy Information Administration (EIA), which was released Monday.
EIA’s monthly report recorded a 32% jump in gas prices in February, compared to the same month in 2012. The federal report lists Henry Hub at $3.45/MMBtu this past February. In a subsequent report released Tuesday, EIA predicted that future power market shares for coal and natural gas generators will depend on relative fuel prices.
“Generation from coal and other fossil fuels displaced natural gas generation,” the EIA said. It characterized the monthly average daily spot gas price delivered in New York City in February as “relatively high” for a second straight month, increasing from $10.36/MMBtu in January this year to $10.46/MMBtu in February.
EIA attributed the spot price jump to “spikes in the daily spot prices as a result of a cold snap that affected the region during February” this year.
Out of a total power generation for the month of a little more than 309 million MWh, natural gas-fired generation provided 80.2 million MWh in February, compared to 91 million MWh the same month in 2012 when total power generation nationally for the month was 310 million MWh.
In contrast, coal produced 123.9 million MWh in February, compared to 113.9 million MWh in February 2012.
Overall gas consumption in February was down 11.8%, EIA said. In total, 593.8 Bcf of gas was burned for generation during the month, or an average of 21.21 Bcf/d, EIA said.
In its Tuesday report EIA said natural gas in recent years has “competed more effectively with coal as a fuel for electric generation” as the cost of operating gas-fired units fell below that of coal plants. But it said in 2012 the national average costs for producing electricity from coal steam plants and natural gas combined-cycle plants “were nearly equal.”
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