All major U.S. power markets have relied more on natural gas to keep a balanced grid system so far this year.
Increased gas-powered generation highlights the fact that the fossil fuel – the single-biggest power generation source in the United States – continues to play a critical role in balancing the power systems amid high air conditioning demand in heatwaves, lower-than-usual wind speeds, and reduced hydropower generation due to drought.
The Biden Administration has set a target to achieve a carbon pollution-free electricity sector by 2035. While coal retirements have accelerated in recent years, replaced by soaring renewables capacity and increased natural gas-powered generation, the U.S. power sector is far from the track to be emissions-free.
Natural gas, which accounted for 39.8% of U.S. utility-scale electricity generation in 2022, isn’t going anywhere. In fact, it has helped balance power generation so far this year, as operators have raised gas-fired electricity supply to offset lower hydropower generation in the Pacific Northwest and lower wind speeds in the Midwest while delivering power amid increased demand during the summer heatwaves.
Natural Gas Share Of Power Generation Jumps
U.S. power generation from gas-fired plants jumped by 10% between January and August 20, 2023 compared to the same period of 2022, although overall electricity generation has declined by 2.1% so far in 2023, Gavin Maguire, Global Energy Transition Columnist at Reuters, reported, citing data compiled by Refinitiv.
The share of natural gas in electricity generation in America has averaged
40.4% year to date, compared to below 36% for the same period last year.
Electricity generation from coal continued to drop in all major U.S. power markets, while clean power generation was essentially flat as lower wind speeds and lower hydropower generation offset a surge in solar power output, the data and analysis showed.
The share of clean power including nuclear and hydropower inched up to 40.5% of America’s total power generation between January and August 2023, compared to 39.9% in the same period in 2022. Despite a surge in renewables installations, power output from wind and hydro was lower than usual in the first half of 2023, due to lower wind speeds and drought in parts where hydropower accounts for a large part of power generation such as the Pacific Northwest.
Renewable Installation Rise Doesn’t Mean More Power Generation
Last year, power generation from renewable sources—wind, solar, hydro, biomass, and geothermal—surpassed coal-fired generation in the electric power sector for the first time ever, the Energy Information Administration (EIA) said, as coal plants are being retired and wind and solar installations boom.
Renewable generation had already surpassed nuclear generation for the first time in 2021 and continued to provide more electricity than nuclear generation last year, the administration noted earlier this year.
In renewables installations, the industry installed 5,218 megawatts (MW) of utility-scale solar, wind, and storage capacity in the second quarter of 2023, according to a report by the American Clean Power Association (ACP) from earlier this month. The newly installed generation, led by solar installations, made Q2 2023 the second-highest second quarter for clean power installations.
There is also a 13% increase in clean power projects under construction or in advanced development compared to the same time last year, the association said.
Cumulatively, operating clean power capacity in the U.S. is now more than 237 GW, accounting for 15.1% of electricity generated. Texas leads with 26.353 GW, or 18% of total operating U.S. clean power, followed by California with an 11% share and New York with 6% of operating clean power, ACP said.
Despite the growth in solar, wind, and battery installations this year, renewables power generation has been basically flat as natural gas has been the power source to pick up the slack when wind speeds were low or hydropower generation faltered due to lower water reservoir levels.
This summer, generation from natural gas, which remains the primary source of generation in the electric power sector, is set to increase by 3% compared to last year, the EIA said in June.
“Additional natural gas-fired generating capacity and favorable fuel costs are the primary drivers of our forecast increase in generation from natural gas this summer,” the administration added, noting that renewables and gas will see increased generation, reducing summer coal demand.
In May, the North American Electric Reliability Corporation (NERC) said in its summer reliability assessment that extreme weather this summer would strain the U.S. power grids, putting two-thirds of North America at risk of electricity shortfalls during periods of peak demand on the hottest days.
Among the reliability issues to monitor is the potential generator fuel delivery risk, NERC said, commenting that “The natural gas supply and infrastructure is vitally important to electric grid reliability, even as renewable generation satisfies more of our energy needs.”
“Fuel supply and delivery infrastructure must be capable of meeting the ramp rates of natural-gas-fired generators as they balance the system when solar generation output declines.”
By Tsvetana Paraskova for Oilprice.com
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