Weather patterns and structural changes in power markets in the eastern United States signaled considerably higher natural gas usage for the first half of the year, according to statistics from the U.S. Energy Information Administration (EIA), a division of the Department of Energy.
Temperatures are getting warmer sooner in the year, the report says, leading to an increased demand for electricity. And while electricity comes from many sources, the increased demand for natural gas-generated power is partly the result of more coal-powered and nuclear plants going off the grid as they age and use of these energy resources loses favor in the U.S.
The EIA report states that 12.1 gigawatts of coal-fired plants will go offline this year alone. Some 32 coal plants, which are about 6 gigawatts of power, will be retired in June alone. Most of these plants are located in Ohio, West Virginia, Kentucky and Georgia.
It remains to be seen how much the increased demand for natural gas will affect wholesale prices. Recent trading indicates mixed results, partly due to weather events and some maintenance outages. Service and supply, however, continue to increase as more natural gas is placed in storage.
Increased supply is undoubtedly affecting momentum in the changeover to natural gas. Fortunately, market forces are keeping supply affordable and service reliable.