Natural Gas a Major Power Generation Fuel

Posted: July 20, 2015

According to the Energy Information Administration (EIA), natural gas passed coal as the major source of U.S. electric power generation in April, a milestone that was to be expected with lower gas prices and the retirement of many coal-fired power plants.

EIA's April 2015 data shows natural gas-fired generation made up 31.5% of total generation versus coal-fired generation at 30%. In April 2012, coal- and gas-fired generation were close due to all-time monthly low gas prices, a warm winter and natural gas production increases. This past April marks the first month gas-fired generation exceeded coal.

Power companies have been installing more natural gas turbines for flexibility and retiring older coal-fired facilities as an abundance of natural gas at low prices and an increase in regulations restricting greenhouse gas emissions have occurred.

EIA’s Annual Energy Outlook projects that coal will retain a greater share of power generation annually through 2040, although the gap between natural gas and coal will narrow through this period. EIA predicts that by 2040 natural gas will make up 31% all generation and coal 34%.

The Pennsylvania Public Utilities Commission (PUC) report released last month indicated the biggest change in the Commonwealth is the use of natural gas for power production. While natural gas usage by residential, commercial, and industrial markets in the state have remained basically steady in the past decade, the total gas consumption for electric generation has increased significantly. In 1997, about 3% of the natural gas deliveries in the state went to electric power generation. In 2013, that amount increased to 38%. This will continue to rise in looking at the total of 11,609 MW proposed new power generation projects in the state as of December 2013. While not all of these projects actually get built, 94% of the capacity represents natural gas projects.