After years of low natural gas prices and countless projections for low-priced gas for the foreseeable future, the dominance of natural gas in power generation is becoming more evident.
According to data released last week by the U.S. Energy Information Administration, natural gas was by far the leading source of generation in the U.S. during the first half of 2016. Natural gas accounted for 33.5 percent of electricity produced through June while coal accounted for 28.1 percent. During the same period last year, 30.5 percent of the nation’s electricity was produced with natural gas.
What’s more, power produced with natural gas reached an all-time high in July. In EIA’s short-term energy outlook, the agency found that gas-fired power plants generated 4,950 gigawatt-hours of power each day in July, up 9 percent from the previous record high set in July 2015.
Nuclear accounted for 20.5 percent of the generation pie during the first six months of 2016, and renewable resources, including conventional hydropower, accounted for 16.5 percent of the generation pie.
U.S. natural gas prices are expected to average $2.36 per million Btu (MMBtu) in 2016 and $2.95 per MMBtu in 2017. In 2006, the wellhead price of natural gas in the U.S. average $6.42 per MMBtu.