DESCRIPTION:  

The natural gas and coal markets are undergoing significant structural shifts in an era in which both fuels have become increasingly competitive within the electric power sector. What separates the recent history of ‘coal-to-gas’ switching (C2G)—to which many market participants have become accustomed—from today and the future are those structural changes which will make future gas and coal burn as a function of gas prices change over time. The past “C2G” dynamics will not be an accurate guide for the present or the future.

EVA’s new quarterly report, Gas-Coal Burn Price Sensitivity Forecast (GCB), is a forecast of how the ongoing dynamics in the electric power sector will impact current and future C2G. The report’s focus is squarely on the sensitivity of gas and coal burn with respect to natural gas prices, and does not consider feedback effects the indicative changes in gas and coal burn would have on those markets themselves. For that reason, the GCB report is a tool in a larger toolkit one would use to analyze gas, coal and power markets.

The GCB report is based on EVA’s own modeling of the electric power sector through the use of the Aurora electric power dispatch model that incorporates EVA’s proprietary unit-specific delivered coal and natural gas prices. EVA’s dispatch modeling also takes into account the future changes in the electric power sector that already are in motion, including coal-fired unit retirements, nuclear retirements and capacity additions, and gas-fired combined cycle unit additions. EVA’s clients have come to rely upon our detailed understanding of coal and natural gas markets, and how those fuels are delivered to generators, for being able to discriminate between fact and speculation about what is occurring in those markets.

The GCB report will contain a number of figures and tables that illustrate the generation and fuel burn sensitivities at a U.S. and regional level for the balance of the current year, and for each of the next two years. For natural gas, the report will also describe the gas-market-specific sensitivities at the census division level. For coal, the report will describe coal burn by basin level on an annual basis.

DEVELOPMENT PRODUCT OFFER:  

EVA is offering the opportunity for selected companies to participate in shaping the report under reduced prices. For more information about this product and offer, please contact A. Michael Schaal at (703) 276-4019 or Erik Schwartz at (516) 349-3024, or via email: [email protected]