Natural Gas Generation to Spike Through 2018

By Editors of Power Engineering

Utilities are planning to add 11.2 GW of natural gas capacity in 2017 and 25.4 GW in 2018, according to a report from the U.S. Energy Information Administration.

Should the plants come online as planned, these additions would be the highest since 2005, and represent a capacity increase of eight percent.

The additions could help natural gas retain its title as the primary energy source for power generation in the long term, even if natural gas prices rise moderately as expected.

The upcoming construction follows a five-year trend of net reductions in coal capacity. From 2011 to 2016, coal lost 47.2 GW of capacity, representing 15 percent of the total fleet. These retirements and conversions of coal to natural gas comes due to environmental regulations and the sustained low cost of natural gas. Prices fell from an average of $5 per million BTU in 2014 to $2.78 per million BTU in October 2016.

Many of the gas plants are under construction in mid-Atlantic states and Texas near natural gas shale plays. Expansions in natural gas pipeline networks have also supported the growth in capacity nationwide.

Even with the construction, the share of electricity coming from gas is expected to fall from 24 percent now to 32 percent in 2017, while coal will rise from 30 percent to 32 percent.

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