Tuesday, April 15, 2014

Texas Electricity Generation March 2014: Natural Gas Regains Market Share from Coal

In the ERCOT Demand and Energy Report released yesterday, moderating natural gas prices likely helped natural gas regain market share in the ERCOT Texas market in March.  Total generation was up as cold weather and rising baseload demand drove daily demand up more than 6% over 2013.  Wind generation was down YOY, but fossil fuels kept a 72.3% market share in both years.  

More significantly, gas regained significant market share from coal in a month with much lower average demand, a sign that price sensitive generators are returning to gas and will continue to do so with prices around $4.50 per mcf and coal prices sitting well above historical levels.  

Coal lost 2.4% of the fossil fuel market, as gas gained the same amount.  Gas was still 1.1% below March 2013 levels, but on an energy basis total gas-fired power was up, from 8.239 TWh last March to 8.545 TWh this March.