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Generation of Natural Gas in 2021 Sees Decline

According to Hourly Electric Grid Monitor data, Natural Gas-fired generation in the Lower 48 states averaged 3,394 gigawatt-hours (GWh) per day in the first four months of 2021, down nearly 7% from the same timeframe in 2020. Higher prices and increased competition from renewables contributed to a drop in Natural Gas generation in the first four months of this year, the first year-over-year drop since 2017.

Due of the colder winter weather, overall power production in the United States rose by 6.6 percent relative to 2020. Due to recent record-high capacity additions to wind and solar power plants, Natural Gas-fired generation faces intensified competition from renewable generation in the United States. Between May 2020 and February 2021 (the most recent month for which data is available), the United States added 22.5 gigawatts (GW) of net wind and solar electric generating power, a 15% rise.

Generation of Natural Gas in 2021 Sees DeclineThe current Preliminary Monthly Electric Generator Inventory expects an additional 28.7 GW of wind and solar power to come online in the second half of 2021. In comparison, 4.8 GW of new capacity came online in the United States between May 2020 and February 2021, representing a 1% rise. During the second half of 2021, we foresee an additional 3.8 GW of Natural Gas capacity coming online.

Because of lower output and higher winter heating demand relative to the previous winter heating season, which lasted from October 2020 to March 2021, Natural Gas prices in the United States have risen since April 2020. Despite a cold spell and record-high costs in mid-February, the Henry Hub benchmark price averaged $2.83 per million British thermal units (MMBtu) from January to April 2021.

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