Western Price Survey
April 24, 2015
A combination of low natural gas prices and forecasts calling for warmer-than-normal temperatures should drive natural gas consumption for power generation across the United States this summer, according to the U.S. Energy Information Administration.
Average natural gas consumption for power generation this summer should reach a near-record high of 26.7 Bcf/d, according to EIA estimates. The existing record for summer natural gas-fired power generation of 27.9 Bcf/d was set in 2012.
Natural gas-fired generation is one of the largest sources of new power generation in the country, notes the agency in its weekly report. A total of 6.3 GW of natural gas generation should be added to the U.S. power grid in 2015.
California is cited as an example, with the EIA noting that natural gas generation helped supplant the loss of nuclear power following the closure of the San Onofre Nuclear Generating Station.
However, the state's renewable-generation mix is also robust, with total renewables on the Cal-ISO grid this week reaching 9,247 MW April 21, which was 32 percent of peak demand for that day.
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Working gas in storage reached 1,629 Bcf as of April 17, according to EIA estimates, a net increase of 90 Bcf from the previous week. This is double the net increase for the same period last year. Storage levels are now 82.6 percent greater than a year ago and 5.8 percent less than the five-year average.
Western natural gas prices rose between 3 and 33 cents in the Thursday-to-Thursday trading period. PG&E CityGate posted the greatest gain, adding 33 cents to reach $2.91/MMBtu.
Western peak power prices rose between $1.80 and $4.50 in the April 17 to 24 trading period with California-Oregon Border posting the greatest gains, adding $4.50 to hit $31.50/MWh. Hubs saw a lift at week's end, with South of Path 15 up $9.10 between April 23 and 24. Average daytime prices ranged from $23.60/MWh at Mid-Columbia to $37.50/MWh at North of Path 15.
Western hubs' nighttime power values were relatively static in the trading period, led by Mid-C, which added $1.65 to reach $22.50/MWh in trading. Average nighttime prices April 24 ranged from $22.30/MWh at Palo Verde to $25.85/MWh at SP15. NP15 posted no trades during the week.
Peak demand on the Cal-ISO grid reached 29,277 MW April 20, which should be the week's high. Solar generation peaked at 5,905 MW April 18, while thermal ramped up to 13,586 MW April 22 [Linda Dailey Paulson].
Archives of the Western Price Survey for the past year are also available online.
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