Power Generated by Natural Gas Set a New Record in July, EIA Says
August 29, 2022
by Peter Maloney
August 29, 2022
Electric power generated by natural gas-fired plants hit a record in July, beating the record set in July 2020, according to the Energy Information Administration (EIA).
The previous record, set on July 27, 2020, was reached when natural gas prices were historically low.
Demand for natural gas for electricity generation has been strong throughout July as a result of above-normal temperatures, reduced coal-fired electricity generation, and recent natural gas-fired capacity additions, the EIA said.
Electricity demand usually peaks in the summer because of demand for air conditioning, and this July was especially hot, ranking as the third hottest on record in the United States.
Despite higher prices, electric sector demand for natural gas remains high. This July, the Henry Hub natural gas price averaged $7.28 per million British thermal units (MMBtu). In July 2020, the natural gas at Henry Hub price averaged $1.77/MMBtu.
In June, the EIA said natural gas spot prices would remain high throughout 2022 with a forecast of the Henry Hub price to average $8.71/MMBtu through August.
Higher gas prices usually push electric generators to turn to other fuels, such a coal, but this summer coal-fired plants have not been used as much as in prior summers because of continued retirements of coal-fired plants, relatively high coal prices, and lower-than-average coal stocks at power plants.
In May, coal inventories at power plants averaged 20 percent lower than prior year levels, the EIA said. In December the EIA said coal stockpiles at electric power plants reached their lowest levels since 1978.
Earlier this month, the EIA said increased economic activity and hot summer weather would increase electricity consumption this year by 2.4 percent over 2021 levels, according to the agency’s Short-Term Energy Outlook (STEO).