Tuesday, November 29, 2016

MISO Gas to Coal Shift

Having previously noted the structural increase in natural gas fired power generation in MISO, the recent price spike in gas should reveal the component, if any, of the switch to gas that is price motivated.  

Here is what the estimated daily burn (at a standard 800 heat rate) looks like for November, on a year-over-year basis.  The timing of the Thanksgiving holiday will cloud the comparisons in the final week of the month, so this is a story that will unfold in the next few weeks if gas prices hold their ground.

Meanwhile, coal consumption, on a gas-equivalent (BCF) basis, has been trending the other direction lately, but also clouded by the low holiday demand: