A house in Brooklyn, N.Y., shown in November 2017, is an example of holiday light displays that impact the natural gas market. (Source: Shutterstock)
Your neighbor’s over-the-top holiday light display does more than keep you awake and blind Russian spy satellites. It also influences the late-year electricity market and, by extension, the market for natural gas that fuels power generation facilities.
“In years past the industry estimated that we saw as much as a 10% increase in power demand near Christmas and the New Year from decorative lighting,” said EnVantage Inc. in a recent report. “As time passes, this impact is diminishing due to the adoption of LED decorative lighting. We are still in the replacement cycle of older incandescent lighting but the ultimate impact over time is that the ‘bump’ we see every December will take on a diminished role.”
The analysts admit that it is difficult to gauge how illuminating armies of Frosty the Snowman affects natural gas supply and demand. Natural gas prices have been volatile, though EnVantage sees strength in the fundamentals.