By - Jim Vess

Natural gas-fired generation to cool in 2020 as the pace for renewables picks up, EIA says

Energize Weekly, January 22, 2020

After robust growth in the last few years, natural gas-fired electricity generation and new natural gas-fired capacity growth will be modest in 2020, according to an Energy Information Administration (EIA) analysis.

The EIA projects generation from natural gas-fired plants will grow by 1.3 percent in 2020, the slowest rate since 2017. At the same time, generation from renewable sources, excluding hydropower, are expected to grow by 15 percent in 2020, the biggest increase in four years.

Renewable resources will also dominate the new plants coming online in 2020 with solar and wind accounting for 76 percent of the 42 gigawatts (GW) of new capacity. New wind farms will add 18.5 GW, and utility-scale solar will add another 13.4 GW.

Between 2019 and 2020 additions, utility-scale solar is expected to add 19.3 GW of capacity, a 65 percent increase over 2018 capacity levels, and wind capacity will increase by 30 GW. “Much of this new renewables capacity comes online at the end of the year, which affects generation trends in the following year,” the EIA said.

Natural gas will account for 22 percent of the new capacity, 9.2 GW, in 2020 and the remaining 2 percent will come from hydroelectric and battery storage.

Meanwhile, in 2020 generation from coal-fired plants will fall 13 percent. The EIA estimates that in 2019, 12.7 GW of coal-fired capacity was retired, equal to 5 percent of the country’s total coal-fired capacity, with an additional 5.8 GW scheduled to close in 2020.

A large portion of the retired coal-fired capacity is in the mid-Atlantic region, whose grid is operated by the PJM Interconnection. The EIA is forecasting a 37 billion kilowatt-hour (kWh) decline in coal-fired generation in 2020, which will in part be offset by a 23 billion kWh increase in natural gas-fired generation.

The EIA said it expects these trends to continue into 2021, with a 17 percent increase in non-hydropower renewable generation. That increase in renewable generation along with a projected increase in natural gas fuel costs, contributes to the EIA’s forecast of a 2.3 percent decline in natural gas-fired generation in 2021. U.S. coal generation in 2021 is forecast to fall by 3.2 percent.

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