Natural gas has displaced coal in the Northeast’s generation mix over the past 10 years

[thackney]

Natural gas has displaced coal in the Northeast’s generation mix over the past 10 years
https://www.eia.gov/todayinenergy/detail.php?id=31172
MAY 11, 2017



The generation fuel mix of electricity in the Northeast Census division of the United States has shifted dramatically over the past 10 years. In the nine Northeast states, natural gas nearly doubled its share of the region’s total generation to 41% in 2016, up from 23% in 2006. Coal-fired generation fell from 31% to 11% of generation over the same period. Nuclear-powered generation as a share of total generation remained relatively constant near 34%. Despite more than doubling over the same period, the share of nonhydro renewables remains relatively small. Overall, total generation in the region declined by 3% between 2006 and 2016.

Increased access to low-cost natural gas from the Marcellus Shale and other regional shale plays has driven the switch away from coal in the Northeast United States. Environmental policies at the federal and regional level, such as production tax credits, the Regional Greenhouse Gas Initiative, and renewable portfolio standards, have also contributed to the decline in coal generation. Pennsylvania continues to be a leading coal generator nationally, despite falling by 31%, or 68 million kilowatthours (kWh), between 2006 and 2016. Coal-fired generation in both New York and Connecticut fell by 90% between 2006 and 2016, or by 19 million kWh and 4.1 million kWh, respectively.



Nuclear generators accounted for 33.9% of Northeast generation in 2006 and 34.98% in 2016. Although no new nuclear plants were constructed in the Northeast during this period, one plant, Vermont Yankee, ceased operations in December 2014. Vermont Yankee alone accounted for 72% of total generation in Vermont in 2006. In addition, several nuclear plants in the Northeast region received approvals for uprates that increased their capacities—some increasing by as much as 15%. Other differences in nuclear output in 2006 and 2016 are likely attributable to the timing of maintenance and refueling cycles.

Hydropower accounted for 7% of Northeast generation in both 2006 and 2016. Nonhydro renewable generation was a relatively small portion of the overall generation mix in 2016 at 5%, but it had the largest percentage growth rate over the past decade. States such as New Hampshire, New York, Pennsylvania, and New Jersey more than doubled their nonhydro renewable generation between 2006 and 2016.

Electricity generation growth from nonhydro renewables came primarily from wind and solar; 93% of the wind plants and all of the utility-scale solar plants currently operating in the region have been installed since 2006. The 30 megawatt Block Island Wind Farm, the first offshore wind project in the United States, began operation in 2016. As of 2016, 2.1 gigawatts of utility-scale solar capacity (plants with at least 1 megawatt of capacity) had been installed in the Northeast region.

Much like the rest of the United States, overall electricity use in the Northeast was relatively constant between 2006 and 2016. Over that period, electricity sales fell by 2% in the Northeast while national sales fell by 1%. Generation in the Northeast fell by 3% over the same period. With the exception of New Jersey, Connecticut, and New Hampshire, which had increases in generation ranging from 5% to 28%, most Northeast states generated less electricity in 2016 than in 2006. New Jersey nearly tripled its natural gas-fired generation between 2006 and 2016, and solar generation grew to 1 million kWh of solar in 2016. Pennsylvania remains the region’s largest net exporter of electricity, despite exports dropping from 73 million kWh in 2006 to 70 million kWh in 2016.

[IsailedawayfromFR]

the power of the Marcellus in one graph.

[thackney]

the power of the Marcellus in one graph.

Report: Cheap Natural Gas Poised to Roil PJM Power Market
http://www.powermag.com/report-cheap-natural-gas-poised-to-roil-pjm-power-market/
05/11/2017 by Sonal Patel

The flood of cheap Marcellus Shale gas driving massive construction of new natural gas power generation capacity could wreak havoc in the PJM power market, Moody’s Investors Service suggests in a new report.

Two of the nation’s largest power markets, Texas and California, already pose a “distressed environment” for unregulated power companies owing to declining market prices, the credit ratings agency said. Now, a glut of new gas generation in PJM—where new plants are expected to add up to 100 TWh, boosting gas power capacity 25%, by 2021—is poised to increase supply “amid little prospect of growth in demand,” it said.

The agency noted that PJM’s latest forecast report indicates load growth has declined over the last decade, with system load falling to 790 TWh in 2015 from 822 TWh in 2005. Peak demand has also fallen to 143 GW in 2015 from 154 GW in 2005. “Over the past few years PJM has also repeatedly cut its forecasts, and the grid operator currently projects weather-adjusted peak demand growth of only 0.2% per year over the next 10 years,” the report says.

Starting in 2021, on-peak prices could plummet by $7/MWh or $3.5/MWh on an around-the-clock basis, which represent declines of between 10% and 15%, the report forecasts.

The gas buildout will prompt more widespread coal plant closures or conversion to gas, it projects. “However, gas conversion is not a panacea for uneconomic coal plants, because the converted units will have poor fuel efficiency and operate as peaking units,” it adds.

The report projects that coal plants running at a 40% capacity factor will be forced to close. About 7 GW of coal capacity are at high risk, and may be forced to run at a 38% capacity factor, it suggests. Another 12 GW, running at a capacity factor of about 58%, would face a “medium” risk.

“Unlike inefficient gas plants, coal plants would have difficulties surviving on capacity payments alone because they have a much higher fixed cash cost to cover, commonly in the $70/kW-yr (or $218/MW-day at 88% availability) range or higher. Therefore, they have to run enough to make enough gross margin in the energy market to support their fixed expenditures,” it says....

[IsailedawayfromFR]

Report: Cheap Natural Gas Poised to Roil PJM Power Market
http://www.powermag.com/report-cheap-natural-gas-poised-to-roil-pjm-power-market/
05/11/2017 by Sonal Patel

The flood of cheap Marcellus Shale gas driving massive construction of new natural gas power generation capacity could wreak havoc in the PJM power market, Moody’s Investors Service suggests in a new report.

Two of the nation’s largest power markets, Texas and California, already pose a “distressed environment” for unregulated power companies owing to declining market prices, the credit ratings agency said. Now, a glut of new gas generation in PJM—where new plants are expected to add up to 100 TWh, boosting gas power capacity 25%, by 2021—is poised to increase supply “amid little prospect of growth in demand,” it said.

The agency noted that PJM’s latest forecast report indicates load growth has declined over the last decade, with system load falling to 790 TWh in 2015 from 822 TWh in 2005. Peak demand has also fallen to 143 GW in 2015 from 154 GW in 2005. “Over the past few years PJM has also repeatedly cut its forecasts, and the grid operator currently projects weather-adjusted peak demand growth of only 0.2% per year over the next 10 years,” the report says.

Starting in 2021, on-peak prices could plummet by $7/MWh or $3.5/MWh on an around-the-clock basis, which represent declines of between 10% and 15%, the report forecasts.

The gas buildout will prompt more widespread coal plant closures or conversion to gas, it projects. “However, gas conversion is not a panacea for uneconomic coal plants, because the converted units will have poor fuel efficiency and operate as peaking units,” it adds.

The report projects that coal plants running at a 40% capacity factor will be forced to close. About 7 GW of coal capacity are at high risk, and may be forced to run at a 38% capacity factor, it suggests. Another 12 GW, running at a capacity factor of about 58%, would face a “medium” risk.

“Unlike inefficient gas plants, coal plants would have difficulties surviving on capacity payments alone because they have a much higher fixed cash cost to cover, commonly in the $70/kW-yr (or $218/MW-day at 88% availability) range or higher. Therefore, they have to run enough to make enough gross margin in the energy market to support their fixed expenditures,” it says....

As I read the article, it appears the presence of cheap and abundant natural gas is a threat to the established power group which requires higher power prices to stay profitable.

If I read this right, this seems like PJM is operating like OPEC, the wannabe destroyer of cheap energy to the world.

[thackney]

If I read this right, this seems like PJM is operating like OPEC, the wannabe destroyer of cheap energy to the world.

I don't read it that way.  I just read that significant change of power plants is going to happen in that area.  They are centered on the Marcellus.



http://www.pjm.com/about-pjm/who-we-are/pjm-history.aspx

[IsailedawayfromFR]

I don't read it that way.  I just read that significant change of power plants is going to happen in that area.  They are centered on the Marcellus.



http://www.pjm.com/about-pjm/who-we-are/pjm-history.aspx

Well, it does look like some of the power companies operating on thin margins dependent upon running coal plants are undertaking some actions to undermine competitors so as to make coal usage more robust.

Kinda like a cartel group think.

[thackney]

undertaking some actions to undermine competitors

Can you point to an action you are referring to?

I cannot understand what you mean.

[Smokin Joe]

the power of the Marcellus in one graph.

Ironically, New York does not allow fracking.

[Fishrrman]

Joe wrote:
"Ironically, New York does not allow fracking."

Unless the political atmosphere there changes, the state probably never will.
I don't see the place ever having anything but a democratic legislature and governor again.
Even if a Republican were able to get himself elected to the governor's office, that person would be about as "conservative" as Susan Collins up in Maine -- which is to say, not at all.

Look at the "Northern Tier" of Pennsylvania vis-a-vis the "Southern Tier" of New York state. One is prospering, the other slowly fading away. Amazing what just "crossing the border" does.

One other comment:
For all the talk about an "abundance" of natural gas for the Northeast, it's done next-to-nothing to lower prices here (SW Connecticut). Prices seem as high as ever.

[Smokin Joe]

I think part of the price problem there is pipeline capacity, @thackney can likely confirm or refute that.
I know that part of the reason New York made the choices they did is that there was concern that the watersheds which feed water to the city would be polluted. I know people who have extensive landholdings in the region and I have little doubt that is part of the picture. I believe their concerns are unfounded, but it is their land, and their concern, and frankly, their choice.
I think protesters are more of a hazard to the environment than the industry.
Lots of people believe the things they hear from people who either don't know any better or from groups who are perfectly willing to lie and distort things to push their agenda for fun and profit. (They even leave dead humans and abandon puppies at their garbage dumps protest sites when they go.)

[Fishrrman]

Joe wrote:
"I know that part of the reason New York made the choices they did is that there was concern that the watersheds which feed water to the city would be polluted. I know people who have extensive landholdings in the region and I have little doubt that is part of the picture. I believe their concerns are unfounded, but it is their land, and their concern, and frankly, their choice."

But the "watersheds" that supply New York City aren't anywhere near the Southern Tier, where the gas reserves are.

New York City gets most of its water from a few big reservoirs in the eastern Catskill region, such as Ashokan and Rondout. Again, these are probably a hundred miles from the "frackable" areas.

The real reason they won't permit fracking is because they're liberal leftist nuts.

[Smokin Joe]

Joe wrote:
"I know that part of the reason New York made the choices they did is that there was concern that the watersheds which feed water to the city would be polluted. I know people who have extensive landholdings in the region and I have little doubt that is part of the picture. I believe their concerns are unfounded, but it is their land, and their concern, and frankly, their choice."

But the "watersheds" that supply New York City aren't anywhere near the Southern Tier, where the gas reserves are.

New York City gets most of its water from a few big reservoirs in the eastern Catskill region, such as Ashokan and Rondout. Again, these are probably a hundred miles from the "frackable" areas.

The real reason they won't permit fracking is because they're liberal leftist nuts.

The pipe 90 feet below the bottom of the Missouri river wasn't going to be anywhere near the water either. Facts don't matter when someone gets scared, just the optics. Those landholders hold considerable sway and own significant tracts in the watershed, and could not be convinced it would not cause problems. Facts did not matter.

[geronl]

Well, it does look like some of the power companies operating on thin margins dependent upon running coal plants are undertaking some actions to undermine competitors so as to make coal usage more robust.

Kinda like a cartel group think.

So, these companies don't compete? Are they monopolies in their little fiefdoms?

[thackney]

So, these companies don't compete? Are they monopolies in their little fiefdoms?

They do compete.  They effectively auction how cheap they can provide power against each other.  Natural Gas low prices and new power turbines are driving the price so low some of the older coal plants are having a tough time competing.

[IsailedawayfromFR]

Can you point to an action you are referring to?

I cannot understand what you mean.

The powermag article states

Dynegy, Calpine Corp., and NRG Energy, are among a handful of merchant generators that are legally challenging recent measures by New York and Illinois to foster subsidies for nuclear plants economically stricken by low market prices amid the torrent of cheap gas. “If the challenges succeed, closure of uneconomic nuclear plant can support power prices and prospects for coal survival,” Moody’s said.

So these companies are suing in order to raise energy prices to benefit them.  OPEC does this too.

[IsailedawayfromFR]

So, these companies don't compete? Are they monopolies in their little fiefdoms?

Read post #15

[thackney]

The powermag article states
So these companies are suing in order to raise energy prices to benefit them.  OPEC does this too.

You think it is a good idea for government to select one portion of an industry to subsidize with tax dollars?  And when the competing companies sue to stop the practice you consider them like OPEC?

Did you like your tax dollars going to Solyndra and the like?  Subsidizing uneconomic nuclear plants is a similar action.

[IsailedawayfromFR]

You think it is a good idea for government to select one portion of an industry to subsidize with tax dollars?  And when the competing companies sue to stop the practice you consider them like OPEC?

Did you like your tax dollars going to Solyndra and the like?  Subsidizing uneconomic nuclear plants is a similar action.

I never said that it was a good idea.

What I responded to is what actions these people were taking to undermine competitors.

They are in fact targeting energy production in NY state to cause prices to rise so those companies can profit.

Like the sordid doings of Chesapeake 10 years ago to undermine coal used for power here in Texas so they could sell their gas. 

[Smokin Joe]

I never said that it was a good idea.

What I responded to is what actions these people were taking to undermine competitors.

They are in fact targeting energy production in NY state to cause prices to rise so those companies can profit.

Like the sordid doings of Chesapeake 10 years ago to undermine coal used for power here in Texas so they could sell their gas. 

The unfortunate part of all that is that it plays right into the hands of the ecowhackos and gives them poo to fling later, along with reinforcing their "message".

[thackney]

What I responded to is what actions these people were taking to undermine competitors

They are trying to get the government to stop selecting winners and losers by unfairly selecting a few to get a tax payer subsidy.

The market price is made artificially lower by adding dollars from the taxpayer, regardless of their electrical use.

[IsailedawayfromFR]

They are trying to get the government to stop selecting winners and losers by unfairly selecting a few to get a tax payer subsidy.

The market price is made artificially lower by adding dollars from the taxpayer, regardless of their electrical use.

I understand all that; however, the govt in this case is NY.  Do you think this negatively impacts us here in Texas?

[Smokin Joe]

I understand all that; however, the govt in this case is NY.  Do you think this negatively impacts us here in Texas?

Natural gas is a major heating fuel here in the Northern Plains. Anything which impacts the downstream market affects us. We also produce some, but that doesn't trickle down and affect as much as the price to consumers.

[thackney]

I understand all that; however, the govt in this case is NY.  Do you think this negatively impacts us here in Texas?

I was talking about the topic in the article.  Were you discussing something else?

[IsailedawayfromFR]

I was talking about the topic in the article.  Were you discussing something else?

Within article and quoted in my prior post, it talks about several companies with coal-generating plants in the area that are suing the state of NY to stop contributing dollars to keep more than one nuclear plant operating.  Calpine et al apparently believe that if this state subsidy goes away, then the nuclear plants will shut down and the price of electricity will rise high enough to make their own coal plants profitable once again.

You said you were against govt picking winners and losers, as I am; however, if the state of NY decides to subsidize with tax dollars from NY citizens, I am wondering whether this has an adverse impact on people like here in Texas.

@thackney @Smokin Joe

[Smokin Joe]

Within article and quoted in my prior post, it talks about several companies with coal-generating plants in the area that are suing the state of NY to stop contributing dollars to keep more than one nuclear plant operating.  Calpine et al apparently believe that if this state subsidy goes away, then the nuclear plants will shut down and the price of electricity will rise high enough to make their own coal plants profitable once again.

You said you were against govt picking winners and losers, as I am; however, if the state of NY decides to subsidize with tax dollars from NY citizens, I am wondering whether this has an adverse impact on people like here in Texas.

@thackney @Smokin Joe

Low Natural Gas prices are good for consumers, suck for producers. If NY wants to spend NY taxes on keeping nuclear plants open and reducing the demand for NG or Coal, it is possible that will depress those markets a little, which means cheaper NG and Coal. For Texas power consumers, that depends on how your power is produced if there might be any benefit. For Texas Natural Gas producers lower prices mean less revenue, less incentive to drill, and perhaps fewer jobs.