MISO Natural Gas Market Share Continues To Steal From Coal

High loads have helped, but in general natural gas is regaining market share from coal since mid-February.  It is not just a few percentage points below 2016 levels, despite a higher market price.  This should help keep a floor under gas prices so long as weather doesn't abandon north america completely this summer:

Winter Heating Requirements Weak Despite Cold Spell

This winter is barely keeping pace with last year's anemic performance.

Through the 3/20 forecast period, we are just 67 HDD's ahead of last year (OCT-MAR), and a full 504 HDD's behind the 20 year average:

Western Canada Natural Gas Storage Surplus Eliminated

A combination of colder weather, higher exports, and lower production have more than eliminated the 40 BCF surplus that western Canada started the year with.  It is now a growing deficit, though weather is moderating quickly from here on out and the big daily storage draws should be history by mid-week.

Coal-to-Gas-to-Coal Switching in the Midwest (MISO) Region

We saw clear and prompt evidence of a switch from gas to coal as power generation feedstock in MISO when gas prices began their sharp rise in late NOV 16.  Then again when prices fell in FEB 17.

Now, with strip prices back above $3 (but HH Spot lagging at the moment), will we see a reversal back to coal domination?

Not yet.

Here are two angles on the question.  The first is the demand adjusted scatter plot, which is indicating that gas is within about 5% of the thermal power market share it held last March, when gas prices were below $2.

The second shows the daily market share of thermal power generation since last November.  Gas was at a 40% market share vs coal back in early November, and then dropped as low as 25% around New Year's Day.  It started rising steadily at the beginning of February, and was near last year's levels, around 40%, by March.  It's been maintaining a high 30's share, clocking 38.4% yesterday.

As higher strip prices translating into the spot market, shouldn't we see gas lose marketshare?

ERCOT Reports February Generation Fuel Mix

ERCOT released their Demand and Energy Report for February 2017 today, and the results are both expected and alarming.  Total generation was off about 2.6% from last Feb, likely due to weather.

My focus was on two things:

Wind power generation....capacity is up from 2016, and the capacity factor seems to be up even more (next gen windmills, better siting?).  In any case, wind generation was up 19.4% over last Feb, from about 6.7 GW average, to 8 GW.  The difference is even larger in March to date.

Market share of thermal output.....it was 60.9% this Feb, vs 64.4% last Feb...down on lower total load and losses to wind.

Natural gas market share of thermal output.....it was 50.7% this Feb vs 67.1% last Feb.  Gas was much more expensive this year.  Falling prices in March should improve this a bit, but last March, gas took a whopping 79.3% of the thermal power market.