Dive Brief:
- Summer generation jumped almost 2%, Argus reported, as inexpensive gas-fired generation filled the gap left behind by retiring coal facilities.
- The U.S. Energy Information Administration last week released data showing almost 9,800 MW of conventional steam coal-fired generating capacity was retired during the first half of this year.
- Despite the summertime boost in generation, EIA said residential retail sales were 1.7% lower in the first half of the year largely because of a mild winter and spring.
Dive Insight:
U.S. power generation spiked over the summer, after running about 1% behind last year's output, Argus reported. Based on data from the Edison Electric Institute, it appears power production was running about 19,000 GWh by Labor Day.
And increasingly, as commodity prices remain low, that generation is coming from natural gas. Summer spot prices were roughly 2.80/MMBtu, about 33% lower than last year.
"While the retirement of some coal-fired capacity has contributed to the decline in coal-fired electricity generation over the past year, the relatively low cost of natural gas has been a more significant driver in coal's declining generation fuel share and the increase in the share generated by natural gas," EIA said in its Short Term Energy Outlook, issued Sept. 9.
During the ifrst half of the year coal accounted for 34% of total generation compared with 40% during the same period in 2014, EIA said. Natural gas accounted for 30%, up from 25% during the first half of 2014.
For full-year 2015 the agency expects coal generation will be 8.2% lower than in 2014, and the annual level of natural gas generation will rise by 14.5%. Higher fuel costs are expected to boost coal generation slightly next year, however, EIA said.
