More U.S. power plants switch to natural gas

Gas flames
Source: DollarPhotoClub

More and more US utilities and power companies are switching to natural gas for their generation plants, owing to the emissions benefits, low prices, and the abundant national supply. In fact, the shale gas revolution has dramatically altered the nature of US power generation.

In 2012, the US generated 30% of its electricity from natural gas, up from 24% in 2010. The EPA estimates this will rise to around 35-40% by 2035; however, according to the newly released infographic, almost half (46%) of the industry’s experts expect gas to account for 50-70% by 2025 – far more than the EPA estimations.

It would appear that the estimations from the EPA may be fairly conservative – after all 63% of planned generation capacity through 2040 is to be natural gas fired. Additionally, there are countless examples of not only new gas-fired construction – such as plants for two new facilities from developers NTE Energy – but increasing reports of power companies switching over and replacing existing coal plants with natural gas. An example would be the Calpine’s conversion of coal plants in Delaware and New Jersey, acquired from Pepco Holdings in a $1.68 billion deal. A significant concentration of coal plant retirements up to 2022 are planned in the Mid-Atlantic, Ohio River Valley and Southeast US, supporting expectations that natural gas will continue to gain market share in these areas.

But why is this national energy source the natural choice for power generation? According to the infographic, gas plants release just 40-60% of the Carbon Dioxide (CO2), 7% of Nitrogen Oxides (NOx) and a miniscule 0.2% of the Sulphur Dioxide (SO2) compared to coal plants. This may be why the majority of those asked (34%) believe that lower emissions are the key advantage of natural gas use for US power needs.

In the US, emission reductions represent the most tangible benefit; last year the US energy industry emitted 40% less SO2 and NOx and 23% less CO2 due to the widespread switch to natural gas for power plants. Yet, similar numbers of respondents see US energy independence, reliability of natural gas over renewables and lower prices as the key advantage (25%, 23% and 18% respectively).

With the multitude of factors driving natural gas-fired power generation development, and the many different benefits to the US of this growth, utilities, energy developers, gas producers, power plant equipment suppliers and technology developers are vying to ensure their stake in this fast-developing market.

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