The Energy Information Administration (EIA) announced that there has been a major increase in eastern natural gas consumption this spring. According to EIA:
Natural gas consumption in the eastern half of the country, particularly in the electric power sector (power burn), has been much higher this spring than in previous years, according to Bentek Energy data. Both short-term weather-related factors and long-term structural changes in power markets led to the increase this year. Temperatures in the past few months have been above average in the eastern United States.
After a cold winter, temperatures have rebounded in the East. The Northeast in particular has experienced the warmest period on record from the beginning of May through mid-June, with average temperatures of 68.4 degrees – 1.8 degrees above the long-term average for this time of year. This has led to higher-than normal air-conditioning use across the region.
Power Plant Retirements
In addition to the high temperatures, coal-fired plants are retiring in record numbers for both economic and environmental reasons. According to the Washington Examiner, 7.8 GW of coal plants were retired in the PJM region in the past few weeks. The majority of this capacity is being replaced by gas-fired plants.
In part, gas-fired electricity is cheaper to produce on a per-kWh basis than coal-based electricity. An April 2013 report from EIA shows that the most cost-effective gas plants have a lifetime levelized cost of electricity of $72.6 per MWh, compared with $95.1 for the most cost-effective coal plants.
Furthermore, the EPA Mercury and Air Toxics rule has forced many coal-based facilities to upgrade their pollution-control equipment or shut down. Finally, coal has far higher emissions than gas, and a combination of state action, the impending federal clean power plan, and voluntary actions taken by individuals and organizations have led many customers to procure cleaner power and push for a cleaner generation mix.