Friday, August 7, 2020

EIA Natural Gas Weekly Update: Power Burn

From the Energy Information Administration:

Natural Gas Weekly Update
for week ending August 5, 2020 | Release date: August 6, 2020

In the News:
U.S. sets record for natural gas power burn
In the United States, natural gas consumed by electric power plants (power burn) set a record high of 46.7 billion cubic feet (Bcf) on Monday, July 27, according to S&P Global Platts estimates. On the same day, natural gas-fired capacity reached an all-time high dispatch level, reaching 315,989 megawatts (MW) in the late afternoon, according to EIA’s Hourly Electric Grid Monitor. Since July 1, 2020, U.S. power burn has exceeded the previous record of 45.4 Bcf/d―set on August 6, 2019―on six days: July 9, July 20–21, and July 27–29. The following are factors that contributed to this increased natural gas use:

Warmer-than-normal temperatures: High electricity demand for space cooling was the major contributor to the record power burn. However, unlike the day of the power burn record set last year, no particular heat wave was associated with this record. Maximum temperatures were higher than normal in the Northeast and Northwest, and minimum temperatures were elevated in much of the country, leading to additional off-peak cooling demands.

Relatively low natural gas prices: Natural gas at the benchmark Henry Hub in Louisiana averaged $1.73 per million British thermal units (MMBtu) for natural gas delivered on July 27, according to Natural Gas Intelligence. From June 1 to July 30, Henry Hub prices averaged $1.64/MMBtu, 30% lower than the prices during the same period in 2019. Adjusted for inflation, this average price is the lowest average price for this period since at least 1993 (the limit of Natural Gas Intelligence’s records).

Structural change in the electric power industry: Since January 2019, 8.4 gigawatts (GW) of natural gas-fired net summer capacity (13.8 GW added; 5.4 GW retired) has been added in the United States, as opposed to 0.2 GW of net summer capacity additions (21.5 GW added; 21.3 GW retired) of other power sources, according to Form EIA-860M data. Most of the new natural gas-fired capacity were combined-cycle power plants using the latest in high efficiency natural gas turbine technology, and these plants are capable of supplying baseload power. In contrast, the retired natural gas-fired plants were mostly steam or combustion turbines, which primarily are used to supply peak power loads.

Most of the non-natural gas-fired capacity that was added since the start of 2019 was intermittent renewables, such as wind or solar. In contrast, most of the retired non-natural gas-fired plants were coal or nuclear-powered, which tended to provide baseload power. As a result of these changes, natural gas-fired generators currently comprise about 44% of the total net summer capacity of all electric power generation in the United States.

Relatively high levels of nuclear power plant outages: According to EIA’s daily nuclear capacity outage report, 5.6 GW of nuclear power plant capacity was not operating on July 27. This amount is 250% higher than the 1.6 GW of nuclear outages on July 27, 2019, and 37% higher than the date’s previous five-year (2015–19) maximum of 4.1 GW. This July, U.S. nuclear outages have averaged 3.6 GW, 113% higher than outages during the same period in 2019....
..... U.S. LNG exports decrease week over week. Five liquefied natural gas (LNG) vessels (three from Sabine Pass, and one each from Cameron and Corpus Christi) with a combined LNG-carrying capacity of 18 Bcf departed the United States between July 30 and August 5, 2020, according to shipping data provided by Marine Traffic.

Front futures 2.2020 up 0.0370