Coal, Emissions, Gas, Nuclear, Renewables

Gas-fired Power Edging Closer to 40 percent of U.S. Generation mix, EIA says

Natural gas-fired power plants will supply 37 percent of U.S. electricity generation this summer, putting it close to the industry record achieved last year.

The U.S. Energy Information Administration’s July report forecasts that the gas-fired portion of the national electric power produced will exceed 200 million MWh for June through August. Power plant operators have added 5.4 GW of new gas-fired generating capacity this year (through April) and plan to bring another 15 GW online through the end of 2018, according to the EIA.

The agency reports that coal’s share of power generation will drop slightly to 30 percent this year, continuing its downward trend. The Midwest accounts for the highest portion of coal-fired power at 49 percent, but even that’s down from the 53 percent of a year ago.

The only region where gas-fired generation is decreasing is in the western area of the U.S. Renewables (excluding hydropower) should account for 16 percent in the west, mainly because producers have added nearly 2 GW of utility-scale solar capacity in the 12 months ending April, according to the EIA.

Coal retirements and stricter emissions standards may account for a good part of gas-fired generation’s historic rise, but the key factor is the bottom line financially. EIA forecasts that the delivered cost of natural gas will average about $3.16 per million British thermal units this summer, two percent below last summer and 60 percent below the price only a decade ago.

And the low cost, of course, is a result of ever-climbing drilling rates. The EIA noted that dry natural gas production averaged 73.6 billion cubic feet day (Bcf/d) last year and may set a new all-time high at 81.3 Bcf/d in 2018.

The EIA also estimates that total utility-scale gas-fired generation will hit 35 percent of the overall U.S. mix by 2019, while coal will fall from 30 percent last year to 27 percent in 2019. Nuclear will stay relatively steady at close to 20 percent while non-hydro renewables will top 10 percent next year. Hydropower will level at close to 7 percent over this year and next.

Yet even the non-coal portion of U.S. power generation is rising to nearly three-quarters of the mix, energy-related carbon emissions is expected rise nearly 2 percent this year before falling in 2019, according to the EIA.