Wednesday, September 25, 2013

Natural Gas Loses 2013 Generation Sales To Coal, Wind, And Lower Demand

Natural gas generation is the big loser in electricity markets, with gas output down 100 billion kilowatt-hours through July, a 13.9% decrease.  But what is displacing natural gas generation?

Coal, wind, and lower demand together have cut the output of natural gas power plants by about 102 billion kilowatt-hours.  Coal generation is up 64 billion kilowatt-hours. Wind is up 17.5 billion kilowatt-hours. Total electricity demand is down 17.5 billion kilowatt-hours.  That adds up to about what gas has lost.

Gas has lost power sales during 2013, mainly because its price has risen above $3.25 to $3.50 per thousand cubic feet for most of this year. Yet, very recent declines in gas prices once again has improved the competitiveness of gas with coal. Coal-gas competition for sales remains intense and trends are fluid.

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