Drivers and Trends in Navigant’s 2017 Mid-Year Energy Market Outlook

In an article for Energy Central, Navigant shares details on expectations for North America’s power and natural gas markets

Despite uncertainties around federal environmental policies and infrastructure, the energy transformation continues to take hold across North American markets. However, trends such as slower load growth, an increase of renewables, innovation in energy storage, and shifting supply and demand patterns in the natural gas market are expected to affect the future for both power and natural gas.

In our 2017 Mid-Year Energy Market Outlook, Navigant looks at both of these markets, detailing their current states and expected outcomes as the energy transformation advances. In an article for Energy Central, Maggie Shober, associate director at Navigant, provides an overview of Navigant’s most recent forecast, which will be discussed in greater detail during a Sept. 13 webinar.

Power Market Trends

Shober said the rate of growth of energy consumption and peak demand has decreased in recent years despite an increase in economic growth. The United States and Canada appear to be transitioning from the long-term trend where growth in energy consumption closely tracked economic growth. However, she said, this does not mean energy consumption will not grow. Navigant’s forecast includes overall growth in both consumption and peak demand, though the levels of growth (as well as energy efficiency and other demand-side resources) are expected to vary between regions.

  • ERCOT and parts of the WECC are among the faster growing regions in the forecast, whereas New York and New England are expected to see lower levels of growth.
  • Load forecasts in PJM and New England are lower than in previous years, leading to a slowdown in generation additions.
  • Navigant’s latest forecast projects that solar generation will have the overall highest growth in ERCOT and the eastern regions of New England, New York, and PJM.
  • California continues to be the U.S. state with the most solar installations, but 2016 also saw high levels of installations in states without renewable portfolio standards.

Natural Gas Trends

While the power market grapples with the evolving energy generation mix and the associated effects on the grid, the natural gas market in North America continues its own evolution. Shober said this evolution is a process that entails ongoing shifts affecting both the power fuels sector and other segments of the natural gas market.

  • Nationally, natural gas demand in the power sector grew from 21% of the electric generation market in 2008 to 34% by the end of 2016.
  • Gas demand is expected to have more significant growth compared to the electric market over the entire outlook term to 2040. This is true even as real natural gas price escalation increases by 30% during that timeframe.
  • The industrial market — which includes manufacturing that uses natural gas as a feedstock for production and in agriculture, construction, and mining — is expected to undergo significant growth as demand for natural gas increases by 48% over the forecast period.
  • Navigant expects exports by pipeline and by ship to continue to increase, growing to represent over 18% of the U.S. natural gas market in 2040.
  • LNG exports from the U.S. equated to approximately $560 million dollars in sales revenue for 2016 alone.

For more details on the North American energy market, read the full article and register now Navigant’s 2017 Mid-Year Energy Market Outlook webinar on Sept. 13.

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