US natural gas power generation decline in 2021 marks first since 2017, EIA says

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Natural gas power generation is down 7% in the first four months of 2021 from the same period a year earlier, reflecting higher prices and increased competition from renewable fuels, new federal data shows. .

The Energy Information Administration (EIA) has stated in a report on Monday the decline marked the first year-over-year decline for the four-month period since 2017. This developed even as overall U.S. electricity generation during the period increased by 6.6% due to an exceptionally harsh winter.

Gas prices soared in mid-February amid Winter Storm Uri – an exceptionally punishing Arctic outburst that brought freezing conditions as far south as Texas’ border with Mexico. Where it could be met, demand shifted to renewables during and immediately after the storm. At the same time, wind and solar capacity continued to grow faster than natural gas capacity, the EIA said.

“Natural gas generation has faced increased competition from renewable energy generation in the United States due to recent record capacity additions to wind and solar power plants,” EIA researchers said.

“Between May 2020 and February 2021 (the most recent month for which we have data), 22.5 gigawatts (GW) of combined net additions of wind and solar power generation capacity came online in the States. States, an increase of 15%,” they added. “We expect an additional 28.7 GW of wind and solar capacity to come online during the remainder of 2021.”

In contrast, they said, between May 2020 and February 2021, only 4.8 GW of natural gas capacity in the United States came online, an increase of 1%. The EIA said it expects an additional 3.8 GW of natural gas capacity to come online during the remainder of 2021.

Rising natural gas prices are also kicking off a mini coal-fired power stimulus, the agency said. He noted that U.S. natural gas prices have risen significantly since April 2020 due to lower production amid the pandemic and higher winter heating demand compared to the previous winter. The benchmark U.S. natural gas price at Henry Hub averaged $2.83/MMBtu in the first four months of 2021, the EIA said.

“Rising natural gas prices in the United States made natural gas generation relatively less competitive with coal generation, providing an incentive to switch from natural gas to coal,” the researchers said. agency. “Coal-fired generation increased nearly 40% in the United States in the first four months of 2021, compared to the same period in 2020.”


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