News

Natural Gas To Be Largest Source of Power Generation

Mar 11, 2016

The Tribune-Review is reporting that for the first time, natural gas will power a larger share of electricity generation than coal over the course of an entire year. According to the Tribune story:

Natural Gas Electricity[This continues] what a regional grid operator calls an unprecedented shift in fuels. The latest short-term outlook from the Energy Information Administration expects gas to fire 33.4 percent of electricity this year, compared with 32 percent for coal, which a few years ago powered half the grid.

"This would be the first time that natural gas provides more electricity generation than coal on an annual average basis," the agency said. Gas outpaced coal during several months last year, but the EIA originally predicted coal would rebound.

Increased environmental regulations, more access to gas from shale and low prices are prompting power plants to ditch coal in favor of the cleaner-burning fuel. The resulting soft market for coal, exacerbated by above-average temperatures this winter and lower global demand, has resulted in mine closings, layoffs and bankruptcies among top producers.

The agency predicts consumers will benefit as well.

The average residential price of electricity is predicted to fall by 0.7 percent in 2016, which would be the first annual decline since 2002, the agency said.

But the price of electricity, and natural gas, is expected to go up in the near future.

The EIA predicts electricity prices to bounce back up in 2017 by more than 2 percent. Coal will pull back even with gas for power generation in 2017 as gas prices are expected to rise with increased demand and exports, the EIA said.

For more Information: 
Feds: More power will be generated from natural gas than coal in 2016
EIA: Natural gas expected to surpass coal in mix of fuel used for U.S. power generation in 2016