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U.S. Natural Gas-fired Power Generation at Record High this Winter

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Natural gas continues to play an increasing role in power generation. 

Earlier this week, the U.S. Energy Information Administration (EIA) and Bentek Energy reported that natural gas consumption in the U.S. electric power sector is currently higher than any previous winter. 

According to Bentek Energy, gas burn in the electric power sector is averaging 25 billion cubic feet per day (Bcf/d) this winter — a 17 percent increase over last winter's average (21.4 Bcf/d). It also marks a significant increase over the five-year average (18.8 Bcf/d). 

What conditions have led to the increase in natural gas-fired generation? 

Low natural gas prices — spot natural gas prices at the Henry Hub in Louisiana hit the lowest annual average level since 1999 — have been the predominant driver of natural gas use in power generation. Coal plant retirements and growing capacity factors for natural gas-fired plants have also played a significant role. 

Looking forward, the EIA's Short-Term Energy Outlook anticipates that natural gas prices will increase in the next two years, translating to a small decrease in natural gas-fired power generation. However, natural gas-fired generation is still expected to be at near-record levels. 

You can read the EIA's full article here. To learn about other important natural gas trends, please check out the Weekly Energy Market Update

Posted: February 12, 2016