Coal news and updates

As temperatures across the US hit seasonal highs, the per-degree intensity of gas-fired power burns has accelerated this summer, even in the face of $4/MMBtu gas, signaling the possibility that generators could be approaching the limit to available fuel-switching capacity at current prices.

 

Month to date, the US population-weighted temperature has averaged about 77.2 degrees Fahrenheit.

Despite record temperatures across much of the West this summer, the most densely populated cities have actually experienced cooler weather this month, compared to July 2020, when the population-adjusted temperature reached a sweltering 79.4 degrees F, data from S&P Global Platts Analytics shows.

 

Not surprisingly, generator demand for gas has been lower this July, compared to last. Month to date, power burn has averaged about 39.2 Bcf/d – down more than 11% from last July's 44.1 Bcf/d average.

 

At any given temperature, though, power burn demand appears to be only slightly lower this summer compared to last – surprising given that benchmark Henry Hub gas is up more than $2 since last July.

 

At 77 degrees F for instance, available sample data shows corresponding power burn demand averaging about 28 Bcf/d this summer. Last summer, the same 77 degree temperature was correlated with a sample average at about 28.5 Bcf/d, Platts Analytics data shows.

 

While higher gas prices have undoubtedly diminished power burn demand this summer, historically the effect of higher gas prices on sample burns, has been much larger.

 

Source : https://www.spglobal.com/platts/en/market-insights/latest-news/coal