Natural Gas Shows Resilience as US Wind Production Declines, ET EnergyWorld

LITTLETON: U.S. electricity producers are becoming increasingly dependent on natural gas for generation, even as the country expands its renewable energy capacity at a record pace.

For years, renewable energy sources have constituted an increasing share of the energy mix, which has allowed energy companies to reduce their use of coal and cut emissions.

However, due to the volatile nature of renewable energy flows, energy companies have had to increase the use of natural gas in their energy systems and remain heavily dependent on gas whenever renewable energy supplies decline.

The country’s high reliance on gas was again highlighted this month as wind power production fell while overall electricity consumption rose due to high temperatures and high demand for air conditioning.

ON THE HOOK

Power companies are having to ensure supply meets demand, adjusting fuel mixes as needed. This month, they had to balance a sharp decline in wind farm production while also meeting a rise in overall electricity demand driven by increased use of cooling across much of the country.

LSEG data shows that from July 1 to 23, energy production from U.S. wind farms fell by 78%, from 57,274 megawatt-hours (MWh) to 12,608 MWh.

Wind power production often declines in summer due to lower wind speeds at the turbines, but on July 23, production was the lowest for that day in at least three years.

To offset this significant decline in clean energy supplies, energy companies increased their energy production from burning natural gas by 27% over the same period, from 217,617 MWh on July 1 to 276,453 MWh on July 23, according to LSEG data.

This rapid increase in gas-fired energy generation brought the share of natural gas in the country’s energy mix to 46.3% in July, compared with an average of 40% in the first half of 2024.

However, higher gas production also contributed to a 3.4% increase in total generation on July 23 compared to July 1, ensuring the country’s energy system was able to cope with increased demand.

KEY PILLAR OF POWER

With its ability to quickly supplement supply shortfalls from other sources, natural gas will remain a key part of the U.S. energy system for many years to come, despite the continued rapid growth of renewable energy sources.

According to the think tank Ember, in 2023 natural gas will meet just over 42% of U.S. electricity demand.

It was by far the country’s largest single source of energy, while 15.61% came from combined wind and solar power sources, 16% from coal-fired power plants, 18.25% from nuclear power plants and about 6% from hydroelectric dams.

As energy companies commit to reducing emissions, the share of renewables in the country’s energy mix is ​​likely to rise, while coal’s share will continue to decline.

However, natural gas will remain the primary fuel for most major U.S. power systems and will likely continue to increase its share of overall electricity generation before gradually declining its share in the generating system over the coming decades.

By Gavin Maguire