Gas, New Projects, New Projects, POWERGEN, Renewables, Wind

EIA: Gas-fired and wind topping U.S. generation mix growth

Gas-fired generation and wind power are the fastest growing pieces of the U.S. electricity mix, according to the latest report from the federal Energy Information Administration.

The EIA forecasts that natural gas-fired electricity generation will increase by six percent this year and two percent nationally in 2020. Wind power, meanwhile, will also grow six percent this year and accelerate by 14 percent in 2020.

In another report Thursday, the EIA said it expected U.S. wind capacity additions this year and in 2020 to be near the record level set in 2012. Wind developers added 3.7 GW by June of this year and expect to increase online capacity by another 8.5 GW before 2019 is done.

The EIA forecasts that an additional 14.3 GW in wind power will be commercially operational in 2020. This timeline is likely influenced by the winding down of the federal Production Tax Credit, which is decreasing by 20 percent per year and currently is set to be unavailable after 2020, according to reports.

These trends vary widely throughout the U.S., depending on the regional transmission operator or system operator overseeing how resources are integrated to the grid. In the mid-Atlantic region, for instance, utilities and independent power producers have added 12 GW of gas-fired generating capacity in the last two years, according to the EIA.

Most of that region is within the PJM Interconnection transmission area. Much of that new gas-fired capacity has replaced retired coal-fired plants, as well as the Oyster Creek nuclear power plant in New Jersey which was retired last year.

The EIA forecasts that natural gas will fuel 39 percent of overall electricity generation in the PJM Interconnection region by next year, up from 31 percent in 2018. Coal-fired generation will fall to 20 percent in 2020, compared with the 54-percent supremacy it held only nine years ago.

A major energy irony is happening in oil and gas-rich Texas. Developers working within the Electric Reliability Council of Texas (ERCOT) territory have added three GW of wind generating capacity since last year and plan on another seven GW by the end of 2020, according to the EIA.

Wind power could supply nearly a quarter of ERCOT’s total generation within another year, pushing back coal in the region’s generation mix.

No surprise, but low-cost natural gas supplies 47 percent of ERCOT-area electricity generation, the EIA says. Consistently higher production levels have also led to lower prices, with the federal agency predicting a 21 percent fall in the Henry Hub natural gas price this year.

So, even with falling natural gas prices, the EIA estimated that the rise in renewable capacity will push the percentage of natural gas-fired power down to 41 percent of the ERCOT mix in 2020.

(Rod Walton is content director for Power Engineering and POWERGEN International. He can be reached at 918-831-9177 and [email protected]).

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