APPA report says natural gas now firmly set as top fuel source

The largest fuel source for the U.S. electric power fleet is natural gas, accounting for nearly 43% of all generation capacity, the American Power Association (APPA) said in a report released March 22.

Coal, with a share of just over 26% of capacity, is the second largest generation source. Nuclear, hydro, and wind together account for nearly 24% of capacity. Solar currently constitutes a little bit more than 1% of all capacity.

Currently, America has just over 1.17 million MW of generation capacity.

While much of the APPA report is devoted to generation capacity, it also comes on the heels of a recent Energy Information Administration (EIA) assessment that natural gas will actually produce more energy this year in the United States than coal.

“A pattern has emerged over the past several years in terms of new generating capacity development,” APPA said in the report. “Natural gas, followed by wind, is the major sources of new generation, though solar deployment continues to expand as well. Nearly half of all new capacity is fueled by natural gas, and this is a trend that is likely to continue for the immediate future.”

While the coal fleet is gradually shrinking and being replaced by generation from renewable source, the APPA report suggests that natural gas has some staying power.

Natural gas continues to be the most popular fuel choice due to costs and efficiency considerations, APPA said. “Environmental regulations as well as increases in natural gas spot prices could spur increased deployment of alternative resources, but the immediate outlook for generation capacity shows continued reliance on natural gas and traditional forms of generation.”

APPA says that 168,000 MW of current generation capacity was added between 2008 and 2015. Nearly three-quarters of this new capacity is fueled by natural gas or wind, with another 11% coming from coal.

There is nearly 341,000 MW of new generation capacity is under development in the United States — 87,000 MW under construction or permitted, and just under 254,000 MW proposed or pending application.

Natural gas will continue to be the top fuel source in the near and distant future, followed by wind. A growing amount of generating capacity is expected to be fueled by solar. In fact, solar constitutes just over 11% of all capacity for plants under construction and that have permits to start building.

“When we look at capacity additions, cancellations, and retirements from 2008 to 2015, we see that natural gas is the only resource for which additions outnumber cancellations,” according to the APPA report.

For all other resources, far more capacity was cancelled than was added. Over 18,000 MW of capacity was retired in 2015 alone, of which coal accounted for almost 80%.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.