Our U.S. natural gas summer forecast for record-breaking 2023 matches

A short analysis

May 30, 2024

We forecast that the use of natural gas for electricity generation in the United States will reach near the record levels set last year this summer. Despite a 3% increase in total U.S. electricity production this summer, we do not expect the use of natural gas to generate electricity to increase. The growth in electricity production will be largely driven by growth in renewable energy production. In our May 2024 Short-term energy forecasts (STEO), we forecast that natural gas consumption for electricity generation will average 44.7 billion cubic feet per day (Bcf/d) in the United States during the peak summer months of June through August, matching the record high set in summer 2023.

Over the last few years, the balance of electricity generation sources in the United States – especially in the summer – has shifted towards more renewables and natural gas, and less coal. U.S. natural gas-fired electricity production has increased in most years since 2014 as natural gas-fired power generation has become more competitive with coal. During this period, natural gas-fired generation capacity also increased.

Since 2014, U.S. power grid operators have increasingly used natural gas-fired generators to meet growing electricity demand at the same time as U.S. natural gas production increases. More efficient combined cycle gas turbine (CCGT) power plants, combined with the increased availability and relatively low prices of natural gas, have made natural gas-fired power generation cheaper to operate, increasing the use of natural gas as an electricity source compared to coal . According to our study, total natural gas-fired generating capacity in the U.S. has increased 19%, or 79 gigawatts, since 2014, and production has increased 60%, or 675,000 gigawatt hours. Electricity per month. In the years 2014-2023, the average annual capacity factor in CCGT power plants also increased from 49% to 59%.

Simple-cycle natural gas turbine (SCGT) power plants, typically used as peak load plants, run more frequently during the summer months, when daily fluctuations in electricity demand are greatest. SCGT power plants are increasingly used in the summer, which is a major contributor to the increase in electricity production from natural gas. Between 2014 and 2023, the capacity factor in SCGT power plants increased from 8% to 14%. The capacity factor of the SCGT plants in 2022 and 2023 averaged over 20% for parts of the summer.

As renewable electricity generation capacity increases, natural gas is increasingly being used to offset the intermittent nature of wind and solar electricity. Since 2014, the share of U.S. summer electricity generation from natural gas has increased almost every year except 2021, rising from 29% in 2014 to 46% in 2023. In 2024, we forecast a slight decline in the share of summer energy U.S. electricity generation from gas to 44% and a shift to generating more electricity from renewable sources, particularly solar energy. Since 2018, electricity production from renewable sources has been steadily increasing, mainly due to increased wind and solar power generation capacity.

Since 2014, electricity production from coal sources has been declining as electricity production from this source has become less competitive. In summer 2023, coal-fired electricity production decreased by 51%, or 218 billion kilowatt hours (BkWh), compared to summer 2014.

Main collaborators: Max Ober, Trinity Manning-Pickett