U.S. GAS, WIND WILL UP

U.S. EIA - In its latest Short-Term Energy Outlook, the U.S. Energy Information Administration (EIA) forecasts that natural gas-fired electricity generation in the United States will increase by 6% in 2019 and by 2% in 2020. EIA also forecasts that generation from wind power will increase by 6% in 2019 and by 14% in 2020. These trends vary widely among the regions of the country; growth in natural gas generation is highest in the mid-Atlantic region and growth in wind generation is highest in Texas. EIA expects coal-fired electricity generation to decline nationwide, falling by 15% in 2019 and by 9% in 2020.

The trends in projected generation reflect changes in the mix of generating capacity. In the mid-Atlantic region, which is mostly in the PJM Interconnection transmission area, the electricity industry has added more than 12 gigawatts (GW) of new natural gas-fired generating capacity since the beginning of 2018, an increase of 17%.

This new natural gas capacity in PJM has replaced some coal-fired generating capacity—6 GW of coal-fired generation capacity has been retired in that region since the beginning of 2018. The Oyster Creek nuclear power plant in New Jersey was also retired in 2018, and the Three Mile Island plant in Pennsylvania plans to shut down its last remaining reactor this month.

These changes in capacity contribute to EIA's forecast that natural gas will fuel 39% of electricity generation in the PJM region in 2020, up from a share of 31% in 2018. In contrast, coal is expected to generate 20% of PJM electricity next year, down from 28% in 2018. In 2010, coal fueled 54% of the region's electricity generation, and natural gas generated 11%.

Wind power has been the fastest-growing source of electricity in recent years in the Electric Reliability Council of Texas (ERCOT) region that serves most of Texas. Since the beginning of 2018, the industry has added 3 GW of wind generating capacity and plans to add another 7 GW before the end of 2020. These additions would result in an increase of nearly 50% from the 2017 wind capacity level in ERCOT. EIA expects wind to supply 20% of ERCOT total generation in 2019 and 24% in 2020. If realized, wind would match coal's share of ERCOT's electricity generation this year and exceed it in 2020.

Natural gas-fired generation in ERCOT has fluctuated in recent years in response to changes in the cost of the fuel. EIA forecasts the Henry Hub natural gas price will fall by 21% in 2019, which contributes to EIA's expectation that ERCOT's natural gas generation share will rise from 45% in 2018 to 47% this year. Although EIA forecasts next year's natural gas prices to remain relatively flat in 2020, the large increase in renewable generating capacity is expected to reduce the region's 2020 natural gas generation share to 41%.

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