EIA: Natural gas to generate more than one-third of US power this year

Dive Brief:

Natural gas will generate 34% of the United States' power this year, with production peaking this month and next as the families fire up their air conditioners to cope with hot summer weather.
Total gas generation will be 4% higher this year compared with 2015, according to new analysis from the U.S. Energy Information Administration.
Coal's share of the power mix is expected to be 30%, with nuclear and renewables following at 19% and 15%, respectively.

Dive Insight:

Coal's decline and the rise of natural gas generation is accelerating. EIA's latest predictions regarding the United States generation mix show a significant shift from the estimates released less than a year ago.

"Natural gas-fired electricity generation in the United States is expected to reach a record level this year," the agency said in a note digging into data form its most recent Short-Term Energy Outlook. "Monthly natural gas-fired generation is expected to reach record highs in July and August, when weather-related demand for air conditioning increases electricity demand.

Gas will generate 34%, compared to coal's estimated 30%, edging out EIA's prediction in December when the agency estimated gas' share of generation would be 31.6%, with the coal generation set at 34.1%.

Gas was second to coal for years and first generated more energy in April of last year. But since then, its share has been rising while environmental regulations and cheap fuelstock have pressured coal plants offline.

However, renewable growth will soon begin to cut into gas' dominance, EIA said.

"Notably, the natural gas share of power generation is expected to decline for several years after 2016 as it competes with renewables and as natural gas prices rise," the agency said. In its Annual Energy Outlook 2016 Reference case, EIA predicts gas generation share falls until about 2020, then climbs steadily over the next two decades.

"Natural gas is projected to regain the largest share in the electricity mix by 2022 and maintain that position through 2040," EIA said.