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    US gas generation down through April: EIA

Summary

Increased renewables, higher prices contributed to decline

by: Dale Lunan

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US gas generation down through April: EIA

Natural gas used for power generation in the US fell by 7% through the year to April, the Energy Information Administration (EIA) said May 24, the first year-over-year decline since 2017 and despite a 6.6% increase in overall power generation owing to colder winter weather.

The agency attributed the decline – to an average of 3,394 GWh/day January-April – to a combination of higher natural gas prices and the relentless growth of wind and solar generating capacity in the Lower 48.

“Natural gas-fired generation has been facing increased competition from renewable generation in the US because of recent record-high capacity additions to wind and solar power plants,” the EIA said in its Today in Energyreport.

Between May 2020 and February 2021 – the most recent available data – wind and solar capacity additions to the US grid totalled 22.5 GWh, a 15% increase. Over the same period, natural gas generating capacity additions amounted to just 4.8 GW, a 1% increase.

Through the balance of this year, the EIA expects another 28.7 GW of wind and solar capacity online, more than seven times the total 3.8 GW for gas.

Even as more renewable capacity became available, higher natural gas prices through the winter heating season, which runs from October through March, pushed generators away from gas towards coal, the EIA said.

The US benchmark for gas at Henry Hub averaged $2.83/mn Btu in the January to April period this year, contributing to a 40% year-over-year increase in coal-fired power generation over the four-month period.