SHORT-TERM ENERGY OUTLOOK – Electricity

Onyx Power and Gas Consulting continues a weekly series providing the Short Term Energy Outlook as of May 10th 2016.  This series of news articles should provide a complete insight on the current conditions of the energy…enjoy, check out archives and come back each week for additional information on how all sorts of energy sources impact our daily lives.

Electricity

Wholesale electricity prices this past winter (October through March) were significantly lower than in the winter of 2014–15. Day-ahead peak power prices averaged $35 per megawatthour (MWh) during winter 2015–16 in the wholesale market for the independent system operator (ISO) of New England, which was 52% below the average peak price during the 2014–15 winter. In the Electricity Reliability Council of Texas (ERCOT) ISO, peak wholesale prices averaged $21/MWh this past winter, a 36% decline from the previous winter. Mild winter temperatures along with low natural gas prices contributed to the lower wholesale electricity prices.

Electricity Consumption

U.S. temperatures during summer 2016, as measured by cooling degree days, are forecast to be close to last summer’s level, but 3% higher than the 10-year average. However, regional variations are expected. Forecast cooling degree days in the Pacific states in summer 2016 are 11% lower than in 2015, while cooling degree days in the East North Central states are expected to be 12% higher than in 2015. These regional differences in the level of cooling contribute to flat growth in summer residential electricity sales and 1.5% summer-over-summer growth in commercial electricity sales.

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Electricity Generation

Total U.S. electricity generation in 2016 is expected to average 11.2 terawatthours per day, slightly below the amount of electricity generated in 2015. Forecast total U.S. generation increases by 1.6% in 2017. EIA expects 34.0% of total electricity will be generated by natural gas in 2016, up from 32.7% last year. The projected share of coal-fired generation averages 30.5% in 2016, down from 33.2% last year. This would be the first year in which the annual generation share for natural gas exceeds that for coal. Coal is forecast to regain some of its generation share in 2017, as forecast natural gas prices slowly rise, but the forecast share of coal generation (31.4%) in 2017 remains below that of natural gas generation (32.9%).

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