Dive Brief:
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Natural gas last month was once again responsible for more than half of the power generation in the Electric Reliability Council of Texas (ERCOT).
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ERCOT’s monthly demand data shows that natural gas supplied 50% of the power generation in August, making it the top fuel in the region for six of the past eight months.
- Coal ranked second as a power generation fuel in August, contributing 30%, and was the most burned fuel in January and April.
Dive Insight:
Low natural gas prices continue to undercut other fuels in markets across the country. The effect is dramatic in ERCOT, which is close to several production sources.
Platts reports average spot gas prices at the Houston Ship Channel of about $2.863 per million British thermal units in August, 3% lower than July's average of $2.966/MMBtu and 5% lower than the $3.018/MMBtu yearly average through August. Low gas prices have resulted in low power prices with Platts reporting average ERCOT North Hub day-ahead on-peak locational marginal prices of $30.58/MWh in August, compared with $35.69/MWh in July.
The biggest increase in fuel use last month in ERCOT was from nuclear power, which rose about two percentage points to more than 9% of the generation mix, but that was still below its 11% contribution in August 2016. Wind power, on the other hand, fell to its lowest level of the year in August, 9.1%, which is lower than its 9.4% contribution in August 2016 and far below the 25% it contributed in this past March.
