U.S. natural gas generation sees first year-over-year decline since 2017
The first four months of 2021 saw the continental United States average 3,394 gigawatt hours (GWh) per day of natural gas-fired generation, marking a 7 percent decline from the same period in last year, and the first tumble in three years, according to the U.S. Energy Information Administration (EIA).
Data from the Hourly Electric Grid Monitor showed increased competition from renewable generation, with record-high capacity additions to wind and solar power plants. Between May 2020 and February 2021, those areas added a combined 22.5 GW of electric generating capacity additions, with another 28.7 GW of wind and solar capacity expected to come online this year. By contrast, only 4.8 GW of natural gas capacity entered service in that time, with another 3.8 GW expected over the course of 2021.
The natural gas tumble is not expected to abate soon, either.
“We expect declines in natural gas-fired generation to continue through 2022,” the EIA said in a statement. “In May’s Short-Term Energy Outlook, we forecast natural gas-fired generation will decline 9.1 percent in 2021 and a further 0.7 percent in 2022.”
While renewables’ growth surely played a role, the decline could also be credited to higher natural gas prices. This has been the trend since April 2020, as natural gas production slackened and winter heating demand increased compared to last year. In fact, natural gas generation has been slightly less competitive than even coal, prompting natural gas-to-coal fuel switching. As a result, coal-fired generation increased nearly 40 percent in the U.S. during the first four months of 2021, compared to the same period in 2020.
Coal generation now accounts for 23 percent of the total U.S. generation.
Overall, though, U.S. electricity generation has been up, largely driven by colder winter weather.
