Blog December 07, 2017

Genscape's power burn estimates have proven to be more accurate than the U.S. Energy Information Administration (EIA). Our models had been indicating that the EIA was significantly underestimating power demand throughout 2017, on the order of 1 Bcf/d or above the past few months. In the latest gas monthly release, the EIA validated our estimates by making massive upward revisions to its 2017 power demand estimates. The EIA report revises volumes from January through August by an average of +0.85 Bcf/d, including a remarkable +1.9 Bcf/d revision for August and a +1.8 Bcf/d revision for March. On a year-to-date basis, the EIA’s reported gas volumes delivered to electric power consumers now match Genscape’s estimates of 25.5 Bcf/d.

Power Burn 2017 YTD

EIA Power Burn Revisions

As a key feature of Natural Gas Analyst, Genscape provides a daily estimate of the gas consumption by power plants for the five EIA gas storage regions. The models use nominations data enhanced by Genscape’s unique power plant monitoring technology. This provides power burn estimates for the current gas day, three months ahead of the EIA.

Power Burn by Month

Genscape Gas Daily Macro Supply and Demand (S&D) uses the power burn estimate to calculate an implied change in gas storage. The S&D report provides insight into gas market fundamentals by breaking down each consumption sector as well as production, imports, and exports. This approach enabled us to confirm that power demand was greater than the EIA’s monthly reported values. If Genscape’s estimate of power burn was overstated, this would have been reflected as an increased error between the S&D implied change in storage and the EIA weekly reported change in storage. Instead, the error has remained low. 

Genscape S&D verses EIA weekly change in storage

Among the other sectors of EIA’s Natural Gas Consumption by End Use, power was the only one with a material change. The revisions trended higher over the course of the summer. Geographically, gas for power was most understated in the Midwest and Mid-Atlantic, with the greatest revisions in Illinois by 490 MMcf/d in March and 461 MMcf/d in August. There were major corrections to states such as New Jersey, Ohio, Indiana, and New York as well, with Texas having the most substantial revision downward at -111 MMcf/d in February.

Genscape's Natural Gas Analyst is a state-of-the-art, browser-based analytics platform that delivers the most comprehensive natural gas market data set. The platform combines that largest public nomination and flow data with sophisticated in-the-field electromagnetic monitoring and thermal imaging (infrared) analysis. To learn more, or to request a free trial of Genscape's Natural Gas Analyst, please click here.

Genscape's Daily Macro Supply and Demand Report provides gas traders and analysts across the U.S. with insight into the national supply and demand by breaking down the market into each consumption sector, production, imports, and exports. Genscape derives a highly accurate estimate of EIA weekly storage inventory using a nominated volume gross up and a supply and demand model, available every Tuesday. To learn more, or to request a free trial of Genscape's Daily Macros Supply and Demand Report, please click here.