Natural Gas Proves Essential as U.S. Wind Power Drops, Says Maguire

(Reuters) — Power producers in the United States are becoming increasingly reliant on natural gas for generation, even as the country builds out renewable energy capacity at a record pace.

Renewable energy sources have been grabbing a steadily growing share of the power mix for years, which has allowed power firms to cut coal-fired power and reduce emissions.

But due to the volatile nature of renewable energy flows, power firms have needed to increase the use of natural gas within power systems and remain heavily dependent on gas whenever renewable energy supplies drop off.

That high gas dependency was highlighted again this month as wind generation slumped just as overall power use climbed due to high temperatures and strong demand for air conditioning.

On The Hook

Power firms must ensure supply meets demand by adjusting fuel mixes as necessary, and this month they had to offset a steep drop in output from wind farms while also accommodating a climb in total power demand due to greater use of cooling systems across much of the country.

From July 1 to July 23, power generation from U.S. wind farms dropped by 78% from 57,274 megawatt hours (MWh) to 12,608 MWh, data from LSEG shows.

Wind generation levels often slump during the summer due to lower wind speeds at turbine level, but on July 23 the production levels were the lowest for that date in more than least three years.

To offset such a notable dip in clean power supply, power firms boosted natural gas-fired generation by 27% over the same period, from 217,617 MWh on July 1 to 276,453 MWh on July 23, according to LSEG.

This steep climb in gas-fired generation pushed natural gas's share of the national power generation mix to 46.3% so far in July, from an average of 40% for the opening half of 2024.

But the higher gas-fired output also helped lift total generation levels by 3.4% on July 23 from July 1, ensuring the national power system was able to meet elevated demand needs.

Key Power Pillar

The ability of natural gas to speedily plug supply shortfalls from other sources means the fuel will remain a critical pillar of the U.S. power system for years to come, despite continued rapid growth in renewable energy sources.

Natural gas supplied just over 42% of U.S. electricity in 2023, according to energy think tank Ember.

That was by far the largest single power source in the country and compared to 15.61% from combined wind and solar sources, 16% from coal plants, 18.25% from nuclear plants and around 6% from hydro dams.

With power firms committed to reducing emissions, renewables look set to grow their share of the national generation mix while coal's share will decline further.

But natural gas will remain the primary fuel source in a majority of key power systems across the U.S. and will likely continue to expand its share of the overall generation pie before being gradually reduced in generation systems over the coming decades.

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