EIA: Higher gas prices drive down gas-fired power generation

Natural gas use for electric power generation in the US slipped 14% during the first 7 months of 2013 compared with the same period last year, mainly because of higher gas prices relative to coal prices, according to the US Energy Information Administration.

The decade-low gas spot prices spurred gas-fired generation last year. “Despite lower gas use for generation thus far in 2013, natural gas generation remains consistently higher than levels before 2012,” EIA said.

Gas use for power varies by region, due to differences in the availability of generating plants, generating plant age and efficiency, and the relative cost of fuels to operate power plants.

“Fuel competition is less intense in parts of the country where coal fuels a very small portion of the generation or where the delivered coal price is extremely low, resulting in relatively greater coal consumption,” EIA said.

In some regions, such as the southeast and mid-Atlantic, natural gas use for power this year is significantly lower, as a result of their relatively drastic inroads of gas use a year earlier.

Gas use for power generation in Texas has not fallen as much in 2013 compared with 2012 and with other regions in the US, since the coal mix in Texas is significantly cheaper and gas-fired power was not competing with the region’s coal-fired generation to the same degrees as in other regions.

Contact Conglin Xu at conglinx@ogjonline.com.

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