Fuel switching in MISO accelerates into autumn on cooler weather, high gas prices
Natural gas is losing market share in the Midwest Independent System Operator this month as cooling autumn temperatures give power generators more optionality to dispatch lower-priced fuels.
In MISO, market share for gas in the generation stack has dipped about five percentage points in September, giving way partly to wind and nuclear, but also coal-fired power, ISO data shows.
Month to date, gas has accounted for just under 26% of total power generation in the Midwest, down from levels around 31% to 32% during the peak-demand months of June, July and August.
The recent drop has been fueled partly by gains in wind and nuclear, both of which have seen their respective markets shares in MISO rise about two percentage points in September. So far this month, wind has captured about 9% of the generation stack, compared with a summer average around 7%. Nuclear has edged up to about 16% this month, compared with an average 14% in June, July and August.
Even as wind and nuclear make inroads, coal remains the dominant fuel in the Midwest with about 43% market share there, roughly at par with levels seen during the peak-demand months of summer.
Prices, demand, dispatch optionality
The recent drop in generation share for gas comes as hub prices across much of the Midwest trade into the mid- to upper-$4s/MMBtu – even experimenting with levels above $5 at some locations – giving generators there a strong incentive to idle more costly gas-fired plants as power demand wanes.
This summer, limited generation capacity appeared to keep gas afloat in generation stack in MISO and other ISOs, despite high prices. With Midwest population-weighted temperatures down about 7.5 degrees Fahrenheit this month compared to last, though, overall generation in MISO has dropped about 292 GWh this month compared to last, giving generators there more dispatch optionality.
