EIA Expects Natural Gas to be Leading Source of US Electricity

Natural gas plant. Colorado.

Credit: Jeffrey Beall / CC BY 4.0

The US Energy Information Administration (EIA) in its April 2017 Short-Term Energy Outlook (STEO) said it expects electricity generation fuelled by natural gas during summer (June, July, and August) to be lower than last summer. It added that it would continue to exceed any other fuel inclusive of the coal-fired generation for the third consecutive summer.

The EIA posted on its website in its April 2017 STEO that the projected share of total US generation for natural gas was expected to average 34%, reportedly down from last summer’s 37%, and still exceeding coal’s generation share of around 32%.

The EIA said that based on the data from the National Oceanic and Atmospheric Administration (NOAA) it estimated the average US population-weighted cooling degree days in the summer of 2016 to have reached the highest level on record. The NOAA projects for summer of 2017 the cooling degree-days to be 11% lower than 2016. The US summer electricity generation is forecasted as 1.16 billion megawatt-hours based on the milder expected temperatures, which would be around 2.4% lower than the generation in summer of 2016.

It was in April 2015, when the natural gas first exceeded coal on a monthly basis as the nation’s primary electricity fuel and later on an annual basis in 2016. The natural gas prices in the summer of 2016 were relatively low with 37% of US electricity generation coming from natural gas and around 33% coming from coal.

The use of natural gas in the power sector is considered sensitive when it comes to natural gas prices. Whenever the natural gas prices have risen, it is observed that the natural gas share of electricity generation mix has fallen slightly.

The EIA said that the Western states had a more diverse mix of energy sources for electricity generation inclusive of access to some of the largest sources of hydropower in the US. California had experienced record levels of precipitation after the drought and snowpack in the winter of 2016. Meanwhile, the share of hydroelectricity generation in the West is projected to rise from the 20% last summer to around 27% this summer. The increased solar capacity is attributed to new solar additions which could reduce the need for natural gas-fired generation in the West, where it is projected that the generation share would fall from 34% to around 27%.

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