Gas, New Projects

EIA: Gas-Fired Generation to Reach Record Level in 2016

Natural gas-fired electricity generation in the United States is expected to reach record levels this year, according to a report issued today by the U.S. Energy Information Administration (EIA).

The Short-Term Energy Outlook expects monthly gas-fired generation to reach record highs in July and August, when hot summer weather increases use of air conditioning and associated electricity demand. Gas generation will provide an average 3.8 million MWh per day in 2016, 4 percent higher than in 2015, the report said.

Gas-fired generation first surpassed monthly coal-fired generation in April 2015, and it has surpassed it in most months since that date. Ultimately, natural gas will provide 34 percent of the United States’ electricity this year, said the EIA. Coal follows behind this at 30 percent, with nuclear at 19 percent, and renewables at 15 percent.

But that lead may not hold for long. The EIA expects gas-fired generation to decline for several years after 2016 as gas prices rise and renewables offer greater competition. In the EIA’s reference case, natural gas’ share of generation falls until about 2020, thereafter climbing steadily over the next two decades. Gas-fired generation is expected to regain the largest share of the country’s electricity mix by 2022 and maintain this lead through 2040, with hot weather advantaging gas above other forms of generation.

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