The U.S. likely set a new daily record on Friday, July 19, of 44.5 billion cubic feet (Bcf) of natural gas consumption by power plants, the Energy Information Administration reports.
U.S. power sector natural gas consumption exceeded the previous record of 43.1 Bcf — set on July 16, 2018 — on five days in July, Kallanish Energy finds.
Higher-than-normal temperatures and relatively low natural gas prices contributed to increased natural gas consumption by electric generators.
Higher electricity demand for air conditioning during a heat wave from July 15-22 drove the increased power generation, especially from natural gas-fired generators, according to EIA.
Although the highest temperatures occurred during the weekend, most states east of the Rocky Mountains experienced warmer-than-normal weather in the days leading up to the heat wave. From July 16-21, the average maximum temperature exceeded 85°F in most parts of the country.
Relatively low natural gas prices have also led to higher natural gas-fired generation this summer. Thus far this summer (June 1–Aug. 1), Henry Hub prices have averaged $2.31 per million Btu (Mmbtu), 19% lower than during the same period last year.
Spot natural gas prices elsewhere in the country have been even lower than those at Henry Hub. Natural gas prices at the Chicago Citygate — the regional price benchmark for Midwestern states — have averaged 19¢/Mmbtu lower than Henry Hub prices so far this summer. Regional spot prices in the Northeast (such as Dominion South in western Pennsylvania) have traded 30¢/Mmbtu lower than Henry Hub.
In recent years, many natural gas-fired generators have come online throughout the country, especially in the PJM Interconnection, the regional transmission organization (Rto) responsible for managing wholesale electricity in 13 states and the District of Columbia.
EIA projects more than 12,000 megawatts of new natural gas-fired electric generation capacity ― primarily combined-cycle units ― have entered service in PJM since the beginning of 2018.
The new capacity has increased total natural gas-fired capacity in the region by 17% and accounts for 55% of the total natural gas combined-cycle capacity added in the nation.
This post appeared first on Kallanish Energy News.