Coinciding with higher natural gas prices, the share of U.S. electricity generation powered by gas is set to decline this summer compared to last, the Energy Information Administration (EIA) said in research published this week.
In its Summer Electricity Outlook, released as a supplement to the May Short-Term Energy Outlook, EIA said it expects natural gas-fired generation to total 420 billion kWh for June, July and August.
That would represent 37% of total U.S. electricity generated this summer. Last summer, natural gas-fired generation accounted for 42% of total domestic electricity generation, according to the agency.
The forecast for reduced natural gas-fired electricity coincides with an expectation for coal-fired electricity to increase.
“Forecast U.S. coal generation will rise to 289 billion kWh this summer, representing an increase in generation share from 22% last summer to 26% this summer,” researchers said.
A main driver of the lower share of natural gas in the power stack will be commodity prices. EIA forecasts an average U.S. cost of $3.13/MMBtu for natural gas delivered to electric generators this summer, which would represent a 46% increase year/year.
“Less natural gas-fired generation is partly offset by increased generation from coal-fired power plants, which would become more economical to run than in previous years,” EIA said. “We forecast that the overall level of U.S. natural gas-fired generation this summer will fall to about the same amount generated in 2018. Although we expect coal generation to rise this summer, the forecast level is still 12% below the 2018 level.”
Renewable sources, particularly wind and solar, are also expected to displace some natural gas-fired capacity this summer, EIA said. Renewables other than hydropower are to generate 138 billion kWh this summer, or 12% of total U.S. generation, according to the agency.
“The extension of federal tax credits is encouraging the continued construction of new wind capacity, much of which is in Midwestern states,” EIA said. “A large amount of large-scale solar capacity is under construction in Texas. This additional solar capacity, along with continued installation of new wind turbines, will likely lead to substantially less generation from natural gas-fired power plants in Texas this summer.”
Hydroelectric power is set to decline to 71 billion kWh in the United States this summer, versus 81 billion kWh last summer, EIA said, attributing the projected decline to the potential for lower-than-average water supply in the Pacific Northwest.
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