Energy Blog: Three Trends in Electric Generation

It’s the middle of August, which in the United States means most places have hit their peak average temperatures for the year. (Where I grew up in the Midwest, the first bubble of cool air arrived around this time, which made high school football practices a bit more bearable.) Now that the risk of heat wave-related blackouts is starting to subside, it’s a good time to think about long term electricity trends. 

Recent analysis pulled from the U.S. Energy Information Administration (EIA), an arm of the Department of Energy, suggests the ongoing transformation of the electricity sector is continuing, perhaps accelerating. If your mental model of the power industry dates back to the 2000s, you need an update.
 

Natural has never been so important

The most important shift in the power industry has been the long-term decline in coal-fired generation and its replacement by natural gas and renewables. Gas had done most of the lifting in this shift, as it has the capability to switch on as needed, rather than depend on weather and astronomical conditions the way wind and solar do. On July 9, those conditions–high temperatures and low wind–combined to increase demand and diminish renewables. According to the EIA, the result was the single biggest one-day spike in electricity generation from natural gas-fired power plants: 6,908,880 MWh in that 24-hour span. 

Mid-summer is peak time for gas-fired generation, though generation in the October-through-April period is also increasing. With coal’s share of the U.S. electric market continuing to decline (in 2023 it accounted for just 16 percent of electric generation) gas’s importance will only increase in the coming years.
 

Reliance on natural gas varies widely by region

Natural gas fueled 43 percent of electric generation in 2023, but that overall figure hides a degree of regional variance. Due to its size and various historical factors, the U.S. is broken into a number of regional power grids, or RTOs. Until the 2000s, the main drivers of differences in the power generation mix were whether a region could tap into hydroelectricity or nuclear power. Those regions that had those sources relied on them, and those that didn’t burned coal. 

Today, the addition of wind power, inexpensive natural gas from shale formations, and (to a lesser extent) solar power has affected the mix. For natural gas, those regional differences mean that in the Northwest, natural gas accounts for only 23 percent of electric power generation (due to the availability of hydropower and Powder River Basin coal), while in Florida, the share reaches 73 percent. 

Interestingly, there are distinct regional variances in the capacity factor for gas power plants, too. According to the EIA, older single-cycle plants, which are often used for peaking since they can ramp up quickly when needed, have a capacity factor of 13 percent, while newer combined-cycle plants, which use the hot exhaust from the gas turbine to run an attached steam power plant, average 66 percent or more. In Florida, the Southeast, and Mid-Atlantic area, this spread is the widest, with a greater reliance for natural gas as baseload power. In the Great Plains and New England, which rely more on variable wind as well as hydroelectric power, combined-cycle plants have a capacity factor of roughly 40 percent, reflecting the penetration of renewables. 
 

Wind power surpassed coal in April and is set to go higher

While it can be difficult to rely on wind power, when it’s available it is the cheapest electricity to be found. Economics–and the development of a new class of turbines that can operate more hours of the year–have enabled wind to take on an increasingly large share of the power generation market. In 2023, it was 10 percent, but that annual figure obscures very large month-to-month variation. The windiest times of year produce around twice as much power as the calmest.

In late spring, high winds overlap with low electricity demand. Because of that, in April 2024, not only did wind generation set a new monthly record, 47.7 TWh, but it exceeded coal power production of 37.2 TWh. 

While that was a temporary blip and wind power has died down during the summer doldrums, it’s likely to be repeated every spring and other months into the future. The combination of new wind turbine installations (some 7 GW are scheduled to be added this year) and coal power plant retirements is expected to lead to the annual generation share for wind power to exceed that of coal before the end of the decade.

Jeffrey Winters is editor in chief of Mechanical Engineering magazine.