U.S. electricity generation fueled by natural gas between June and August 2017 will be lower than the same period of 2016, but will continue to exceed that of any other fuel including coal-fired generation for the third summer in a row, according to U.S. Energy Information Administration (EIA) on Tuesday.
The projected share of total U.S. generation for natural gas is expected to average 34 percent this summer, which is down from 37 percent last summer but still exceeds coal’s generation share of 32 percent, the Administration explained.
Natural gas first exceeded coal as the nation’s primary electricity fuel on a monthly basis in April 2015 and on an annual basis in 2016, the EIA noted, reminding that a decade before 2016, 25 percent of U.S. electricity generation came from natural gas and 46 percent from coal during the summer period.
The Administration also added that the use of natural gas in the power sector is sensitive to natural gas prices and as natural gas prices have risen, the natural gas share of the electricity generation mix has fallen slightly.
"Over the first three months of 2017, the Henry Hub natural gas price averaged $3.01 per million British Thermal Unit (MMBtu) compared with $2.00/MMBtu during the same period of 2016. As a result, the natural gas share of the U.S. electricity mix fell from 32 percent in the first quarter of 2016 to 29 percent in the first quarter of this year, while coal’s share of generation rose from 29 percent to 31 percent over that same period," it explained.
The EIA expected that the Henry Hub price would continue to average slightly more than $3.00/MMBtu throughout the summer.
Lastly, the EIA projected that at a national level; the shares of both natural gas and coal will be lower than last summer, as output from hydroelectric and other renewable generators is expected to increase.
Especially with increased solar capacity because of new solar additions, Western states can reduce the need for natural gas-fired generation in the West, where the forecast generation share falls from 34 percent to 27 percent, it concluded.
By Ebru Sengul