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U.S. Sees Drop in Gas-Fired Power Production

Natural gas-fired power generation in the United States peaked in 2020, and it will continue to fall as it competes with increasingly affordable wind and solar capacity, according to analysts who say renewables’ growth is being “supercharged” by rising fossil fuel costs and disruptions in energy security.

“The transition has just started,” Dennis Wamsted, energy analyst with the Institute for Energy Economics and Finance (IEEFA), told Utility Dive.

“We do believe that the takeoff is right now.”

Renewable energy could comprise 33% or more of the U.S. power market by 2026, finds the IEEFA, amending a 30% projection from just last year that analysts now believe was “on the low end” of possible growth. Combined with existing nuclear generation, the share of carbon-free electricity could be pushed well above 50%—“a massive transition from just five years ago,” IEEFA writes in its most recent U.S. power sector report.

“The soaring cost of fossil fuels and unexpected disruptions in energy security are now supercharging what was already a torrid pace of growth in solar, wind, and battery storage projects,” write the analysts.

Concerns about methane emissions from gas production and distribution also led to a decline in gas use, they add.

A report by the U.S. Energy Information Administration (EIA) echoes IEEFA’s assessment, projecting that U.S. wind and solar farms will grow to 22% of the U.S. power sector this year and 23% in 2023, while gas-fired generation falls to 35% this year and next.

“Although new natural gas-fired power generating units are scheduled to come online in 2022, they are likely to be run at lower utilization rates than in recent years,” the EIA said. The agency expects the rise of renewable energy production will also push coal-fired generation down to 21% next year, from 23% in 2021 and 2022.