New York Nuclear Power Plant Closes
Natural gas futures have remained range-bound this week after increasing by 17% since the beginning of April. Colder than normal weather, strong LNG exports, low gas production and a very tight supply/demand balance were the main drivers of this rally.
As prices for natural gas approach $3/MMBtu electric generators will look to switch from gas to coal in order to cut costs for power generation. If this happens it should put downward pressure on natural gas prices.
Today’s injection of 60 Bcf into storage brings total gas in storage to 1,958 Bcf which is 3% below the 5 year average level.
After remaining in the $11/MWh range for the past two weeks, real-time power is finally starting to creep up in price. The 30 Day Real-time average cost of electricity was $12.69/MWh on May 5th.
In other news, the Indian Point Energy Center in downstate NY shut down its nuclear reactor on Friday, April 30th for the final time. This marks the end of nearly 60 successful years of safe, virtually carbon-free power generation. Indian Point was largely responsible for powering New York City and the lower Hudson Valley region.
Prior to it’s closure Indian Point was generating more electricity than all the wind and solar in New York State. With its closure the bulk of the plants electricity output will be replaced by gas generation.
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