Natural gas-fired capacity growth spurred by shale plays and low gas prices

Falling natural gas prices and increased generation capacity have contributed to substantial increases in natural gas-fired power capacity in 2015, a trend the Energy Information Administration (EIA) expects to see continue through 2018.

According to the EIA’s annual Short-Term Energy Outlook published this month, natural gas-fired generation will exceed coal-fired generation this year. Coal’s share of power generation has dipped due to numerous plant closures prompted by the U.S. Environmental Protection Agency’s new Mercury and Air Toxic Standards rule that came into effect in April, as well as more competitive natural gas prices. Eighty percent of the generating capacity retired in the U.S. last year was coal-fired.

Following up on a 19 percent growth rate in gas-fired generation in 2015, the construction of significant new facilities in the Southwest and Mid-Atlantic states near major shale plays will continue to spur growth in the industry, according to the report. These two regions lead the nation in number of permits currently filed for the construction of new facilities. The EIA anticipates 18.7 GW of new gas-fired capacity will come online in the next three years in these regions.

Two of the most significant shale plays in the U.S., the Marcellus and Utica Plays, span the Mid-Atlantic states, including Pennsylvania, West Virginia and Ohio, where a total of 5,100 MW of gas-fired capacity is currently under construction.