Petroleum-fired electricity generating plants meet demand in peak periods

Oil-fired power plants produced less than 1% of the total amount of electricity generated in the United States in 2016, according to the U.S. Energy Information Administration. These plants accounted for 3% of the total electric generating capacity at the end of 2016.

These plants burn petroleum liquids such as distillate or residual fuel oils and “are generally used for short periods during times of peak electricity demand,” according to the EIA. “Otherwise, petroleum-fired power plants operate mostly at low capacity factors because of the high price of petroleum relative to other fuels, air pollution restrictions and lower efficiencies of their aging generating technology.” About 70% of the existing plants were built before 1980.

“A fundamental shift in the perception of oil as a utility fuel occurred during the 1970s when world oil markets experienced sharp price increases,” according to the EIA. “Supply shortages during world events such as the Arab Oil Embargo, the Iranian Revolution and the Iran-Iraq war also discouraged petroleum-fired electricity generating capacity additions in the United States.”

U.S. oil-fired plants have a generating capacity of 36.4 gigawatts, and more than 68% of the capacity is in 10 states, “primarily in coastal states with access to marine ports,” according to the EIA.

Since 2012, these plants have been generating about 1 million to 2 million megawatt hours monthly, except for the Januarys of 2014 and 2015 when generation spiked because cold winters in New England led to a rise in natural gas demand, requiring petroleum generators to be used to meet the load.