Commodity market report

ERCOT power markets short-term outlook December 2014

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Report summary

Last winter, weather driven demand drove higher average natural gas prices across North America. This year, higher pricing and reliability challenges look to be less of a concern, as coal supply limitations look to be regionalized. Lower natural gas prices and coal retirements needed for MATS compliance promote more natural gas generation. Additionally, inter-regional gas on gas competition will ultimately provide an increase in market share for generators in the highest priced gas markets.

What's included

This report contains

  • Document

    NAPS STO ERCOT 12 31 2014.xls

    XLS 26.07 MB

  • Document

    ERCOT power markets short-term outlook December 2014

    PDF 376.26 KB

  • Document

    ERCOT power markets short-term outlook December 2014

    ZIP 3.67 MB

Table of contents

  • Executive summary
    • Strong winter demand intervals needed to provide upside to natural gas pricing
        • Winter natural gas withdrawal rates to rise as weather driven demand should outpace a mild December
        • Current level of low oil prices to slow natural gas supply growth in 2016
        • Marcellus and Utica natural gas production continue to put the squeeze on coal demand with international markets failing to offer support
        • Below average stockpiles may limit coal market ability to respond to any natural gas price and power demand volatility this winte
        • Fuel supply inadequacies limited to regional markets
        • NERC generation balances defined by system retirements and coal-to-gas substitution levels
        • Figure 1: NERC wide generation balances 2015-2016
        • Figure 2: Forward natural gas price sensitivity
        • Sensitivities highlight potential natural gas market share
        • Regional coal to natural gas demand curves and market share impacts
        • Figure 3: Natural gas power generation sensitivity to natural gas prices
  • Scenarios and sensitivities

Tables and charts

This report includes 4 images and tables including:


  • Supply: Image 1
  • Supply: Image 2
  • Supply: Image 3


  • Scenarios and sensitivities: Table 1

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