Thursday, April 27, 2017

Southern Power Pool: Natural Gas Rapidly Gained Market from Coal in April

For multiple reasons, SPP has been using substantially more gas and less coal this month.  Even though total generation, and thermal generation, are not up but down, the dispatch curve is suddenly favoring gas again.  Gas achieved its highest 1-day share in two years yesterday, at about 45% of the thermal power market.

As the heat begins to build, this trend will be important to track.  Last year gas was cheap.  Very cheap.  Until mid-summer.  This year, it seems that coal's price advantage isn't helping (In SPP specifically), so when that YOY comparison fades in June, will gas make new utilization highs?

Wednesday, April 26, 2017

Changes in MISO Natural Gas Market Share

Further to a previous post, higher gas prices and lower overall power demand have shifted the gas demand curve, and steepened the slope.  At lower aggregate demand, gas market share of carbon based power generation is much below 2016:

Nuclear Power Plant Outages Continue at Nearly 1.5 BCFED Over 2016

Nuclear power plant refueling and maintenance season continues with nearly 1.5 BCFED more power offline than last year at this time.  Outages should bottom out in the next two weeks as plants return to service for summer cooling season.

Tuesday, April 25, 2017

MISO Natural Gas Demand Struggles, as Total Demand Also Struggles

Total load in MISO this month remains anemic.  The lowest loads of the year, and the lowest April average load in many years, is holding down fossil fuel potential.  So far this month, there has not been a single day with load above the April 2016 monthly average!

With gas also losing market share to coal on price, usage of this hydrocarbon is down about 15% MTD. 

Thursday, April 20, 2017

Natural Gas Inventory Builds Too Much

Today's natural gas inventory build of +54 BCF was above expectations, but gas didn't sell off too much, just down 2-4 cents.  

Inventories are high, but production has been stubbornly low.  Everyone is awaiting an expected surge in output, but projections continue to be revised lower, or rather 'later'.  

Exports have been price supportive, and imports from Canada, though high, are at the expense of Canadian storage inventories so it can't go on indefinitely.  

Losses of power burn market share to coal have been in line with consensus expectations, on the order of 3 BCFD so far this shoulder season.  Gas demand has been severely hurt by western hydro output, but helped by nuclear outages, both of which should persist for months (hydro more so).