Resource Use: September 2023

Supply and fuel consumption

In this section, we look at the resources used to produce electricity. Generating units are chosen to run primarily on their operating costs, of which fuel costs account for the lion's share. Therefore, we present below, electricity generation output by fuel type and generator type. Since the generator/fuel mix of utilities varies significantly by region, we also present generation output by region.

Generation output by region

Net electricity generation in the United States increased by 1.8% compared to September 2022. All areas of the country, except for the West, saw a year-over-year increase in electricity generation. The Western region was the outlier, seeing a 9.0% decrease in electricity generation, as this part of the country experienced a much cooler September this year compared to last. This led to a decreased need for residential cooling in the West and thus, a decrease in demand for electricity. Texas saw the largest increase in year-over-year electricity generation (up 10.8%), due to the record temperatures experienced during September 2023.

The change in electricity generation from coal was mixed throughout the country, with only the Southeast and Florida seeing an increase in coal generation compared to the previous year. All areas of the country, except for the West, saw an increase in natural gas generation. Most areas of the country saw an increase in electricity generation from other renewable sources, with Texas (up 25.9%) and Florida (up 23.5%) seeing the largest percent increase in other renewables generation compared to September 2022.

Fossil fuel consumption by region

The chart above compares coal consumption in September 2022 and September 2023 by region and the second tab compares natural gas consumption by region over the same period. Changes in coal and natural gas consumption were similar to their respective changes in coal and natural gas generation.

The third tab presents the change in the relative share of fossil fuel consumption by fuel type on a percentage basis, calculated using equivalent energy content (Btu). This highlights changes in the relative market shares of coal, natural gas, and petroleum. Most regions of the country saw their share of natural gas increase at the expense of coal.

The fourth tab presents the change in coal and natural gas consumption on an energy content basis by region. The changes in total coal and natural gas consumption were similar to the changes seen in total coal and natural gas net generation in each region.

Fossil fuel prices

To gain some insight into the changing pattern of consumption of fossil fuels over the past year, we look at relative monthly average spot fuel prices. A common way to compare fuel prices is on an equivalent $/MMBtu basis as shown in the chart above. For the fourth consecutive month, the average price of natural gas at Henry Hub increased from the previous month, going from $2.65/MMBtu in August 2023 to $2.74/MMBtu in September 2023. The natural gas price for New York City (Transco Zone 6 NY) saw an increase in price from the previous month, going from $1.31/MMBtu in August 2023 to $1.54/MMBtu in September 2023. The average spot price of Central Appalachian coal increased from the previous month, going from $2.88/MMBtu in August 2023 to $3.01/MMBtu in September 2023.

For the fourth consecutive month, the New York Harbor residual oil price saw an increase in price from the previous month, going from $13.67/MMBtu in August 2023 to $14.54/MMBtu in September 2023. Even with many parts of the country experiencing above average temperatures during September 2023, oil was still priced out of most electricity markets for baseload operations during the month.

A fuel price comparison based on equivalent energy content ($/MMBtu) does not reflect differences in energy conversion efficiency (heat rate) among different types of generators. Gas-fired combined-cycle units tend to be more efficient than coal-fired steam units. The second tab shows coal and natural gas prices on an equivalent energy content and efficiency basis. The Henry Hub natural gas price ($21.95/MWh) saw an increase from the previous month ($21.25/MWh) but was still below the Central Appalachian coal price ($32.54/MWh) in September 2023. The price of natural gas at New York City ($12.36/MWh) decreased from the previous month ($10.50/MWh) and was below the price of Central Appalachian coal ($32.54/MWh) during September 2023.

The conversion shown in this chart is done for illustrative purposes only. The competition between coal and natural gas to produce electricity is more complex. It involves delivered prices and emission costs, the terms of fuel supply contracts, and the workings of fuel markets.