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Southeast power markets short-term outlook December 2014

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14 January 2015

Southeast power markets short-term outlook December 2014

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.

Table of contents

  • Executive summary
    • Strong winter demand intervals needed to provide upside to natural gas pricing
    • 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
      • Coal pricing
        • 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
      • Coal-to-gas switching competition
        • 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:

  • Scenarios and sensitivities: Table 1
  • Supply: Image 1
  • Supply: Image 2
  • Supply: Image 3

What's included

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  • Document

    Southeast power markets short-term outlook December 2014

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