Generation

In an era of increasing renewable sources on the electricity grid and the loss of large amounts of baseload coal-fired generation, flexibility has become a mantra for natural gas-fired power stations, as evidenced by a deal unveiled last week between a unit of General Electric and Edison International’s Southern California Edison Co. (SCE) utility.

With near triple-digit temperatures blanketing most of the state and coastal areas, California neared all-time peak loads for electricity heading up toward 50,000 MW on Thursday, meaning that natural gas sendouts were approaching summer records, too. Wind power was running low (973 MW), requiring more gas-fired generation to make up the load.

Keeping Texans cool under the blazing summer sun has been driving electricity consumption in the Lone Star State to record levels and doing the same for natural gas consumption used to fuel power generators. Meanwhile nationwide, natural gas recently bested coal in the power generation arena, the U.S. Energy Information Administration (EIA) said.

As another footnote to the changing electric generation fuel mix in New England, plans for a new 900 MW natural gas-fired power plant in Rhode Island were unveiled, with Gov. Gina Raimondo touting the project’s boost for the state’s economy and environment.

September natural gas is set to open 3 cents higher Wednesday morning at $2.84 as traders factor in a mix of near-term warmth and the prospects of a thin government inventory report Thursday. Overnight oil markets rose.

Natural gas forwards markets for September trading were mostly quiet since last week, showing only small changes of less than one cent on average. As with every rule, however, there are some exceptions.

The expiring August natural gas futures contract is expected to open 3 cents higher Wednesday morning at $2.85 as near-term weather outlooks turned more supportive. Overnight oil markets eased.

August natural gas is expected to open 2 cents lower at $2.83 Friday morning as even though Thursday’ storage report was considered bearish, the long-term surplus suggests futures trading will be rangebound. Overnight oil markets retreated.

The shift in the use of natural gas in Pennsylvania from residential and industrial consumption to electric power generation has been dramatic…