US gas generation ‘to reach near record high this summer’

Power plant operators added 5.4GW of new capacity during the first four months of 2018

Natural gas-fired power plants are expected to supply around 37% of electricity generation in the US this summer.

It will reach near the record high share that was seen in the summer of 2016, according to the US Energy Information Administration (EIA).

It forecasts the share of coal generation to drop slightly to 30% in June, July and August this year, continuing a multi-year trend of lower production.

The share of power generation supplied by natural gas has increased over the past decade while coal supply has fallen, primarily as a result of sustained low natural gas prices, increases in capacity and retirements of coal plants.

The EIA states between 2015 and 2017, the cost of natural gas delivered to electric generators averaged $3.16 (£2.4) per million British thermal unit (MMBtu), compared to $7.69 (£5.9)/MMBtu between 2006 and 2008.

Power plant operators added 5.4GW of new natural gas generating capacity during the first four months of 2018, with an additional 15GW scheduled to come online before the end of the year.

This addition would be the largest increase in natural gas capacity since 2004, the report adds.

The electric industry also added 2.6GW of new utility-scale solar and wind capacity during the first four months of the year, with an extra 9.6GW expected to come online through 2018.

More than 10GW of coal capacity was retired over the 12-month period ending April 2018.

The EIA states: “The combination of relatively low natural gas prices, environmental regulations and supportive renewable energy policies has led the industry to build new natural gas-fired and renewable capacity and to retire coal-fired power plants.”

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