Plant Fuel Costs

We learned from our friends at Bentek this week that gas demand from the power sector averaged a record 25 Bcf/d in 2012 – nearly 20 percent higher than 2011. The increase in demand for natural gas for power generation largely resulted from system operators switching from coal plants to natural gas after the price of natural gas fell to 10 year lows in April 2012. Today we look at how power generation plant fuel costs drive coal-to-gas switching.