Nuclear outages to boost US gas demand in December, January: Barclays
Houston (Platts)--21Nov2012/153 pm EST/1853 GMT
Nuclear plant outages will boost US natural gas demand from power
generators through January, but a light spring maintenance season will
translate into lower gas burn in the first few months of 2013, according to a
Barclays Capital report released late Tuesday.
A "drastic drop" in US nuclear plants' output has boosted gas demand
from generators so far in November, the analysts said. November's nuclear
generation low is possibly record-setting, surpassed only by the heavy
turnaround season in spring 2011, they added.
US Nuclear Regulatory Commission data shows nuclear plants are running at
an average of 74,769 MW so far this month, about 12,500 MW or 14% lower, than
the same time a year ago.
Article continues below...
|Request a free trial of: Electric Power Daily|
No other daily publication delivers so complete an account of North American power industry news as Electric Power Daily. For those who need solid grounding every day in this complex arena where so much is at stake, Electric Power Daily is a must read.
Barclays analysts estimated that if this was replaced entirely by
gas-fired generation, it would mean a 2.2 Bcf/d increase in gas demand
compared with the same time a year ago.
Announced restart dates and maintenance schedules suggest nuclear plant
utilization will be 3,750 MW and 1,900 MW lower in December and January 2013,
respectively, than the year-ago levels. If fully replaced by gas, that would
translate into an incremental 675,000 Mcf/d and 340,000 Mcf/d, respectively,
for those months.
The analysts noted that most of the plants are offline because of
scheduled maintenance, while others are undergoing prolonged shutdowns.
Some, such as the 482-MW Fort Calhoun plant in Nebraska and the 838-MW
Crystal River-3 unit in Florida have been idle since 2011 and 2009,
Fort Calhoun has been offline since April 2011 because of several
technical and mechanical issues, but it due to start back up in the first
quarter of 2013.
Crystal River-3 is grappling with containment issues and repairs are not
expected to begin before next summer. A restart is scheduled for sometime in
Other plants, meanwhile, are undergoing upgrades to boost capacity, such
as Florida's Turkey Point-4 and St. Lucie-2.
From a year-on-year perspective, the analysts said, about 4,400 MW of
nuclear capacity -- about 4.2% of the US' entire nuclear capability -- has
been idled this year and have unknown restart dates.
In most cases, prolonged nuclear outages have provided tremendous
support for gas prices.
When the two San Onofre nuclear units in California were shut in January
due to a degradation of tubes in the steam generators, gas-fired generation
in the state jumped nearly 50% in the first seven months of 2012, the
They added: "The outage has significantly affected the regional gas
market, with natural gas becoming the marginal fuel for power generation in
Spot gas prices at West Coast city-gates markets --- specifically
Southern California Gas city-gates and Pacific Gas & Electric's city-gate ---
were boosted by the outage, often coming in as the highest-priced markets in
North America this past shoulder season, according to Platts data.
Hurricane Sandy had a similar effect on the East Coast. The analysts
said either ahead of the storm, or because of damage from it, three nuclear
facilities were shut, while operating rates were reduced at three others,
affecting a total of 4,490 MW of nuclear generation capacity.
In the spot market, these outages exacerbated an already tight
supply-demand situation and boosted New England city-gate spot markets to
some of their highest levels of the year at over $8/MMBtu and helped to give
rise to $3/MMBtu price increases in intraday trading, according to Platts
Looking forward, however, a light spring maintenance season compared with
2012's is on tap.
Barclays analysis suggests nuclear generation in March, April and May
2013 should run 6,500 MW, 4,700 MW and 9.300 MW, respectively, higher than in
2012. If replacing just gas-fired output, this would mean a fall in gas burn
by power generators of around 1.2 Bcf/d, 800,000 Mcf/d and 1.7 Bcf/d, in
those three months, respectively, compared with the same time this year.
Of the 35,750 MW scheduled for plant turnaround next spring, Barclays
said about 13,700 MW will affect the Northeast, 7,700 MW will be in the West
and 6,000 will be in the Southeast.
--Samantha Santa Maria, firstname.lastname@example.org
--Edited by Keiron Greenhalgh, email@example.com