The U.S. Energy Information Administration (EIA) expects natural gas-fired power generation to set a record this year, providing an average of 3.8 million megawatt hours per day, a 4% increase from 2015.
Record highs are expected in July and August as summer temperatures drive power demand for cooling higher, according to EIA's latest Short Term Energy Outlook (see Daily GPI, July 12).
Natural gas-fired generation first surpassed coal generation on a monthly basis in April 2015. Gas-fired generation has surpassed coal-fired generation in most months since then and is expected to continue to exceed coal generation through the remainder of the year, ultimately providing 34% of the United States' electricity generated this year, EIA said. Coal's share of the 2016 U.S. electricity generating mix is expected to be 30%, with nuclear garnering 19%, and renewables taking 15%.
However, the natural gas share of power generation is expected to decline for several years after this year as competition from renewables increases and as natural gas prices rise, EIA said. The natural gas share of power generation is expected to fall until about 2020. After that it is expected to climb steadily over the next two decades, the government agency added.
"Natural gas is projected to regain the largest share in the electricity mix by 2022 and maintain that position through 2040," EIA said Thursday.
Many of the new natural gas-fired capacity additions in development are near major shale gas plays, EIA said last May. The Mid-Atlantic states and Texas have the most natural gas-fired capacity additions under construction with planned online dates within the next three years (2016-2018).
"Florida has the largest cumulative additions of gas-fired capacity currently under construction, with three plants that have a combined capacity of 3.8 GW expected to come online in 2016-2018," EIA said. "Although the state has no shale gas production, the retirement of older, less-efficient coal units and the replacement of some oil-fired capacity have led to the expansion of regional pipeline networks to bring more shale gas to serve gas-fired generation.”