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NEI Energy Markets Report (July 10th - 14th)

Here's a summary of what went on in the energy markets last week:

Electricity prices increased last week due primarily to hot temperatures (see pages 1 & 2). Gas prices at the Henry Hub fell $0.09 to $5.60/MMBtu, falling again to the lowest price over the past year (see page 4).

In 2006, total U.S. natural gas consumption is projected to fall below 2005 levels by 1.7 percent then increase by 4.2 percent in 2007. Electric power sector consumption of coal is projected to grow by some 0.3 percent in 2006 and by another 1.6 percent in 2007. Power sector demand for coal continues to increase in response to high natural gas and oil prices. Electricity consumption is expected to increase by 0.6 percent in 2006 and by 1.4 percent in 2007. In 2005, residential electricity prices rose an estimated 5.1 percent nationally. In 2006, these prices are expected to increase by 7.8 percent and, in 2007, by another 2.9 percent (see page 8).

For the report click here (pdf). It is also located on NEI's Nuclear Statistics webpage.

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Nick said…
hhmm. Coal jumped last report, and fell back again this report. Did the large change in TXU plans fall through?
David Bradish said…
No, it appears several utilities canceled some of the planned plants.
Nick said…
hmmph. There seems to be remarkable volatility in these plans. I get the feeling that utilities are feeling very anxious, and indecisive, about the best way to go between various power sources.

Gas is expensive and volatile, coal is vulnerable to pollution and co2 concerns, wind is constrained by the limit to how quickly turbine manufacturers can ramp up and solar is still expensive. Nuclear has a long leadtime, and concerns about historical regulatory instability and cost overruns.

What's a utility to do?
David Bradish said…
There are more than 300 GW of coal and gas capacity each. There's about 100 GW of nuclear. Just as many cancellations have occurred for each of these technologies. It's an interesting trend.
Robert Merkel said…
While I don't expect the NEI guys to comment directly, but it seems to me that the refusal of the US to bite the bullet with respect to carbon pricing is probably making it harder for utilities to make sensible investments in new capacity. Everybody knows that carbon pricing is coming. But *when* it's going to come, and *how* it's going to come, are going to make a big difference for utilities in their investment plans.
Nick said…
"carbon pricing is coming. But *when* it's going to come"

Clearly, not until after January 20th, 2009.

Makes it hard to plan, with long lead times for coal and nuclear.

I would guess that this will tend to favor wind power and natural gas, simply because they can be installed quickly.

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