Natural gas-fired electricity generation to fall this summer

by Talk Business & Politics staff (staff2@talkbusiness.net) 28 views 

Electricity generated with natural gas is expected to fall to 34% this summer, from 37% last summer, according to the U.S. Energy Information Administration. But for the third consecutive summer, it will be used to generate more electricity than any other fuel source, including coal, which will produce 32% of U.S. electricity.

This summer is expected to be milder than last summer, and the number of cooling degree days is expected to fall 11%, based on data from the National Oceanic and Atmospheric Administration. Summer electricity generation is expected to decline 2.4% to 1.16 billion megawatt hours.

Electricity generated with natural gas usually reaches a peak in the summer “when power plant operators use natural gas-fired combustion turbines during the hottest part of the day to meet electricity demand for air conditioning,” according to the EIA. In April 2015, natural gas exceeded coal as the primary electricity fuel in the United States.

It was the first time natural gas exceeded coal on a monthly basis, and it first exceeded coal on an annual basis in 2016 when natural gas prices were low. Last summer, 33% of electricity was generated with coal. In summer 2006, natural gas was used to generate 25% of U.S. electricity while coal generated 46% of it.

The share of natural gas used to generate electricity has fallen slightly as the price has risen. In the first quarter of 2017, the Henry Hub natural gas price has been an average of $3.01 per million Btu compared to $2 per million Btu in the same period in 2016. “As a result, the natural gas share of the U.S. electricity mix fell from 32% in the first quarter of 2016 to 29% in the first quarter of this year, while coal’s share of generation rose from 29% to 31% over that same period,” according to the EIA. The Henry Hub price is expected to remain at more than $3 per million Btu this summer.

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