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More U.S. Electricity Coming From Natural Gas

By Rick Laezman | Dec 15, 2017
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As the landscape of electricity generation in the United States evolves, natural gas continues to account for an increasing share of the mix.

A recent report issued by FCBI-Energy's Petrochemical Update Division outlines the future of the industry. Entitled "U.S. Natural Gas Power Engineering and Construction Trends and Outlook 2018," the white paper was published in conjunction with the 2018 Gas Power Engineering & Construction (GPEC) Conference, scheduled for June 18–19 in Pittsburgh.

The report identifies a number of factors that are helping to create a favorable environment for natural gas development. Construction of new natural gas fired generation has remained active due to the low cost and wide availability of the fuel. For example, the discovery of shale gas and fracking have lowered the price of long-term natural gas fuel supply contracts in the United States down from $8–12 per MMBtu to the $3 per MMBtu range.

The report references Energy Information Administration (EIA) data, which shows construction costs for natural gas fueled power plants are around $696 per kilowatt (kW) capacity. Weighted average cost are one of the lowest, just behind hydro power. This is significantly less than the most common forms of renewable generating facilities, with solar at $2,921 per kW, wind at $1,661 per kW and biomass at $1,531 per kW.

The white paper quotes Bruce Turczynski, Management Consultant for BT All Gen Engineering, who explains that gas plants, especially peakers, "have a niche market in support of grid stability where there is significant renewable market penetration.”

An aging fossil fuel infrastructure, customer needs for greater power flexibility and efficiency, increased legislation and the amount of time it takes to build a facility are also contributing to industry growth. Natural gas is expected to remain the go-to fuel to replace coal-fired generation retired in recent years or scheduled for closure.

Natural gas is also outpacing nuclear power, especially as the latter form of generation sees more plants closing. From 2013 to 2016, average net generation of electric power from nuclear energy remained nearly flat, but the generation from natural gas has grown by about 6 percent per year.

Natural gas is expected to account for just over 42 percent of all new generation from 2018–2022. The geographic regions with the greatest amount of natural gas fired generation under development are the Northeast, Great Lakes, Southwest and Southeastern United States.

About The Author

LAEZMAN is a Los Angeles-based freelance writer who has been covering renewable power for more than 10 years. He may be reached at [email protected]

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