US Power Producers Switch Back To Cheap Coal
via The Global Warming Policy Forum (GWPF)
http://www.thegwpf.com
A shift in relative prices has spurred a modest shift in power generation away from natural gas and back towards coal.
U.S. natural gas prices have tumbled by more than 10 percent since late May as hedge funds start to liquidate a near-record bullish position accumulated in the expectation of a tighter market that failed to materialise.
Hedge funds and other money managers reduced their combined net long position in the two main futures and options contracts linked to Henry Hub prices by 584 billion cubic feet in the week to May 30. […]
In addition, the number of rigs drilling for oil has risen by more than 400 since May 2016, and many of these oil wells are producing large volumes of associated gas since February 2016.
Gas output is still down compared with year ago levels but the pace of decline has slowed and there are indications that production is about to start rising.
At the same time, higher gas prices are rationing consumption by electricity generators, especially owners of combined-cycle plants that operate as baseload and consume large volumes of fuel.
Power producers paid an average price of $3.36 per million British thermal units for gas in March 2017 up from just $2.23 in March 2016.
The shift in relative prices has spurred a modest shift in power generation away from natural gas and back towards coal.
Combined-cycle power plants ran at slightly reduced rates in March 2017 compared with March 2016 and March 2015, according to the U.S. Energy Information Administration.
Coal-fired power plants, on the other hand, saw a sharp increase in capacity utilisation, running at an average of 45 percent of their full capacity, up from just 36 percent in the same month last year.
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via The Global Warming Policy Forum (GWPF) http://www.thegwpf.com
June 5, 2017 at 02:40AM
