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5 Key Electricity Trends from 2015

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Last week, the U.S. Energy Information Administration (EIA) reported that natural gas spot prices at the Henry Hub in Louisiana finished at the lowest annual average since 1999

This week, the EIA reported it was a similar story for U.S. wholesale electricity prices in 2015. Based on the EIA's findings and reporting in Electric Power Monthly, here are five key electricity trends from 2015.

1. Wholesale electricity prices were down 27-37 percent across the country.

In 2015, monthly average wholesale electricity prices for peak hours were down between 27 percent and 37 percent from 2014. The price decline was mainly caused by lower natural gas prices as natural gas-fired generation dictates the marginal price set in many markets.

2. Prices were the highest in the U.S. Northeast. 

One similarity with 2014: wholesale electricity prices were generally the highest in the U.S. Northeast and the lowest at Mid-Columbia in the Pacific Northwest. 

3. Natural gas-fired generation became even more competitive.

Given the affordability of natural gas, natural gas-fired power generation became even more competitive in 2015, outpacing coal-fired generation in five different months: April, July, August, September, and October. 

4. Coal-fired continued to be phased out. 

While coal-fired generation was still expected to make-up the lion's share of generation in 2015, it also accounted for the most generator retirements. More than 11,000 megawatts (MW) of U.S. coal-fired capacity was retired by October, with an additional 2,600 MW scheduled to retire by the end of the year. 

5. Natural gas, solar, and wind dominated all new capacity.

As expected, nearly all new utility-scale capacity greater than 1 MW added in 2015 was either natural gas, solar, or wind units.

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To learn more about the correlation between natural gas and electricity prices, check out the Weekly Energy Market Update. And to learn how your business can take advantage of cheaper power prices, please visit our Electricity page.

Posted: January 12, 2016

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