Natural Gas Use – 5/19/16

The mix of energy sources used in U.S. electricity generation has changed dramatically over the past few years as natural gas use has risen significantly at coal’s expense. Last year, the average capacity factor of natural gas combined-cycle plants exceeded that of coal steam plants for the first time. The capacity factor of the U.S. natural gas combined-cycle fleet averaged 56% in 2015, compared with 55% for coal steam power plants. A capacity factor close to 100% would mean near continuous operation at maximum output.

The capacity factor of the U.S. natural gas combined-cycle fleet has risen from an average of 35% to more than 56% in the last decade. In comparison, the percentage of coal plants running at capacity factors above 70% fell from 50% in 2005 to less than 20% in 2015.

gas beats coal


Natural gas-fired power generation increased 19% in 2015, and the U.S. EIA’s May 2016 Short-Term Energy Outlook forecasts that natural gas-fired generation will surpass coal generation for the year.

Many of the natural gas capacity additions are concentrated around the Marcellus and Utica shale regions, located mainly in Pennsylvania, West Virginia, and Ohio, which have been leading the growth in U.S. natural gas use and production for several years. New natural gas infrastructure additions in two regions now allow transport of natural gas to major population centers along the Atlantic Coast.

Significant levels of natural gas-fired capacity are also under construction in Texas, the largest gas producer, as well as Florida. Although Florida has no shale gas production instate, the retirement of numerous coal power plants has necessitated the building of regional pipeline networks to bring more shale gas to serve gas-fired generation.

nat gas additions

Growth in natural gas-fired generation capacity is expected to continue over the next several years, as 18.7 gigawatts (GW) of new capacity comes online between 2016 and 2018.

Low natural gas prices rooted in a mismatch between weak Asian demand and surging supplies from the U.S. and Australia are expected to keep usage high. The global gas glut may take years to clear since, over the next five years, Australia and the U.S. will add more than 120 million metric tons of annual capacity in natural gas, or an addition equivalent to more than a third of current total capacity. Many energy companies are counting on anti-pollution efforts to boost natural gas use, hoping that it will find greater demand in power generation and as an alternative fuel for shipping vehicles.

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