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LOW NATURAL GAS PRICES STIMULATE ELECTRICITY SECTOR DEMAND FOR NATURAL GAS

Low Natural Gas Prices Stimulate Electricity Sector Demand for Natural Gas

Study Released December 31, 2011

Natural Gas Report - December 2011

Natural gas demand from the electricity generation sector has been increasing steadily over the past few years, and will likely remain strong over the long term. Persistent low natural gas prices, in addition to new regulations affecting coal-fired electricity generation, serve as incentives for electricity producers to adopt natural gas as a preferred fuel source. This article will briefly discuss the changing price trends of three electricity generating fuel sources (natural gas, coal, and uranium) and provide a levelized unit cost (LUEC) comparison of new build, base-load electricity generating facilities.1 While hydro is another base-load source for electricity generation, hydro has been excluded from the analysis since most of the significant opportunities for large-scale hydropower have already been exploited in North America.

December 2011