X hits on this document

673 views

0 shares

0 downloads

0 comments

37 / 179

2009 State of the Market Report

Prices and Revenues

However, mild weather and lower overall load in 2009 led to very few periods of shortage. Long-run price signals are further explored in the net revenue analysis later in this section.

As noted previously, fuel prices are the largest component of most generators’ marginal cost and are, therefore, a primary determinant of the overall price of energy. Poor economic conditions beginning in late 2008 drove the relevant fuel prices for electricity generation down by 30 to 55 percent in 2009. Figure 3 below shows the prices for natural gas, oil, and coal in the Midwest ISO region from 2007 to 2009. The top panel shows the nominal prices in dollars per million British Thermal Units (“MMBtu”) while the bottom panel shows the fuel price movements in relative terms with each fuel indexed to January 2007.

Oil

$15.54

$20.82

$11.62

Gas

$6.82

$8.79

$3.92

IB Coal

$1.31

$2.80

$1.97

PRB Coal

$0.57

$0.74

$0.51

$16.00

Figure 3: Midwest ISO Fuel Prices 2007 – 2009

Fuel

2007

2008

$24.00

2009

$32.00

$/MMBtu

$8.00

Index (Jan 2007=1)

4.0

3.0

2.0

1.0

$0.00

0.0

J F M AM J J A S O N D J F M AM J J A S O N D J F M AM J J A S O N D

2007

2008

2009

Oil

Illinois Basin Coal

Powder River Basin Coal

Natural Gas

Overall, natural gas prices fell 55 percent from 2008 and 2009 on average, while the oil prices fell 44 percent. Natural gas prices averaged only $4 per MMBtu in 2009, the lowest annual average in years. Natural gas prices began and ended the year at approximately $6 per MMBtu but fell to as low as $2 in the late summer. Oil prices rose steadily from an average of almost $10 per MMBtu in January to more than $13.50 in December. Coal prices declined substantially

Page 4

Document info
Document views673
Page views673
Page last viewedWed Dec 07 16:29:40 UTC 2016
Pages179
Paragraphs5369
Words52656

Comments