The electric utility industry relies on a diversity of fuels for power generation, primarily coal, nuclear, natural gas, and a variety of renewable sources such as hydro, wind, solar, and biomass.  Coal has historically produced about 50% of the electricity generation, though its share of the fuel mix has been steadily declining, reaching 42% in 2011. In contrast, natural gas’ share of generation has been increasing, reaching nearly 25% in 2011.  Nuclear generation composed 19.2% of electric generation in 2011, and hydro and renewables compose the remaining 12.5%.  This generation mix is shifting due to a number of factors, including fuel prices and regulatory initiatives.  The markets for these fuels are interrelated and supply, demand, and price changes for one fuel have impacts on the others.  This is particularly the case for coal and natural gas, as well as natural gas and renewables.  Things that can influence a company’s choice of generation include:

• Electric demand:  Is it increasing, remaining flat, or declining?  What season and what time of day does it peak?  A utility must meet demand at all times.
• Regulations:  There are a number of environmental regulations being implemented by the Environmental Protection Agency that are impacting the economics of electric generation and influencing generation fuel choice.  In addition, utilities are regulated by the Federal Energy Regulatory Commission and their state public utility commissions, which oversee the electricity markets, hold them accountable for the reliability of electric system and determine whether to allow a utility to recover its capital and operational costs from customers.
• Economics:  Utilities must make the case to their regulator’s that they made prudent investments. 
• Social and political factors:  In many cases, these are intertwined with economic, regulatory, and demand drivers. 

EEI Resources

• EEI Coal Plant Retirement and Conversions Issue Paper
  Between 2010 and 2012, the electric power industry announced that it would retire or convert over 50 gigawatts (GW) of coal-fired generation capacity over the next decade. Throughout 2012, EEI’s Retirement and Conversions Task Force, which includes technical and policy staff from over twenty member companies, worked to identify lessons learned and key issues to consider throughout the power plant decommissioning process. Topics addressed include choosing the right contractor, demolition methods, asset management strategies, managing risk, environmental remediation, and communication strategies. Appendix: Presentations
  
   
  • Generation Status Update 
    This monthly report tracks capacity additions, announcements and cancellations of new capacity for all sectors by fuel and prime mover.
  • Generation Fuels - 2011 Market Development 
    The report tracks relevant information about the different fuels markets (coal, gas, nuclear, renewables and oil) for the previous year. It includes data and analyses on generation output and fuel price trends, as well as the most prominent factors behind them, such as domestic production, imports, global markets, and policy developments.
  • Hydraulic Fracturing: Concerns and Activities - Updated October 2012 

    With the rapid development of unconventional resources, the future of natural gas looks promising both in the United States and abroad but increased concern about the environmental impacts of shale gas production could hamper the development and cost-effectiveness of this resource. This report summarizes the main areas of concern and describes existing state and federal regulations as well as different ongoing actions undertaken by government agencies and the industry. This update includes an expanded section on litigation and a table summarizing the different state and federal regulations that apply to hydraulic fracturing operations.  

  • Liquefied Natural Gas Infrastructure in the United States: A Capacity Adequacy Study
    Despite the uncertainty surrounding the future of natural gas supply and demand in the United States, most forecasts project a considerable increase of LNG imports in coming years. This study analyzes the adequacy of the country’s LNG infrastructure by looking at the effects of three different future scenarios on LNG import and regasification capacity.
  • Generation Fuels 2009 - Natural Gas  
    This report tracks relevant information about the natural gas market.  It includes data and analyses on generation output and fuel price trends, as well as the most prominent factors behind them, such as domestic production, imports, global markets, and policy developments. 
  • Renewable Energy: Growth and Challenges in the Electric Power Industry 
    This guide provides an overview of recent trends and challenges presented by renewable energy sources, specifically wind power, bioenergy, geothermal energy, hydrogen power, solar energy, hydropower, and tidal power. While emphasizing the multiple benefits derived from renewable energy sources, the guide also focuses on a variety of key issues, such as the importance of federal and state support policies, and the need to maintain a reliable power system.
  • State Generation & Transmission Siting Directory: Agencies, Contacts, and Regulation
    This resource contains regulatory contacts and summary information for siting of generation and transmission facilities in 50 states. Print copies are available. Please contact Rick Loughery at 202-508-5647 or rloughery@eei.org. 
  • Wholesale Markets Guide 
    This product outlines the operating procedures, regulations, and market rules for regional transmission organizations.