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LITTLETON, Colorado, Aug 23 (Reuters) – U.S. power producers increased output of electricity from natural gas by more than from clean power sources in the opening eight months of 2023, as electricity firms grappled with low wind speeds and heavy demand from power-hungry air conditioners.
Total power generation across the lower 48 states through Aug. 20, 2023 declined by 2.1% from the same period in 2022, data compiled by Refinitiv shows.
But generation from natural gas climbed by over 10%, widening gas’ lead as the country’s main source of electricity.
The share of power generated from gas averaged 40.4% through mid-August, up from under 36% in the same period in 2022.
That increase in gas’s share of the generation mix eclipsed the growth seen in electricity generated from clean power sources, including nuclear, solar, wind and hydro power.
Through Aug. 20, clean power accounted for 40.5% of total power generation, from 39.9% in the same period in 2022, as drops in national hydro and wind output over the opening half of 2023 offset expansions in solar capacity and slowed clean power’s penetration into the U.S. electricity system.
U.S. generation from coal declined by 21% through Aug. 20 from the same period in 2022, demonstrating continued cuts to coal use by power producers to reduce pollution from the sector.
A TEXAS TEMPLATE?
The power generation mix of the main utility in Texas, the top U.S. state in terms of electricity production, offers a small-scale glimpse of the key power sector trends playing out at a national level.
Data from the Electric Reliability Council of Texas (ERCOT), which operates a grid that carries roughly 90% of the state’s power load, shows that electricity produced from natural gas increased by a similar degree as at the national level, rising 10.9% through Aug. 20 from the same period in 2022.
The share of natural gas in the Texas electricity mix averaged 43.4% through Aug. 20, up from 39.5% the year before.
Coal-fired power in the ERCOT system dropped by nearly 18% from the year before, while output from solar sources jumped by 30%, helping clean power sources hold flat at a 43.3% share of the generation mix, despite falls in both hydro and wind power generation this year.
Texas’ aggressive renewable energy capacity expansion plans should see clean power generation establish a durable lead over natural gas in the electricity mix by the end of the decade.
However, sustained high power demand from homes and industry across the state will likely ensure continuing demand for natural gas to offset the intermittency effects from renewable energy sources on the ERCOT grid.
CALIFORNIA
California’s massive power system, which has the country’s highest proportion of clean energy in the generation mix, also sharply increased output from natural gas so far in 2023.
Data from the California Independent System Operator (CAISO) shows gas-fired generation increased by 15.6% through Aug. 20 from the same period last year, helping gas secure a 36.3% share of the mix (up from 31%).
Output from clean power sources, including renewables and hydro, increased by 12%, despite drops in output from biomass and wind power sources, and a decline in imports from neighbouring states.
Clean power sources accounted for a 57.4% share of the CAISO generation mix, up from 50.7% in January through Aug. 20 in 2022.
THE NORTHWEST & THE REST
The Pacific Northwest of the United States had the steepest decline in clean power generation of all the major power markets in the country.
Lengthy dry spells have reduced hydro power generation in the Northwest Power Pool system by nearly 20% through Aug. 20 from the same period in 2022, cutting hydro’s share to 33% of the generation mix from 38% in 2022.
Nuclear power output also contracted this year by over 20% due to an outage at the region’s only reactor, while coal generation declined by 9%.
To offset reduced generation from hydro, nuclear and coal plants, power firms once again dialled up natural gas output, which climbed by 25% from the year before through Aug. 20.
In the Midcontinent Independent System Operator (MISO) market, which covers 15 states across the centre of the country, natural gas generation also rose sharply – by 14.2% through Aug. 20 – to help offset a nearly 22% drop in coal generation and a close to 10% drop in wind power output due to unusually low wind speeds.
A recovery in wind speeds later this year, along with newly installed wind power capacity, should help boost wind power’s share of the generation mix in the MISO market and elsewhere across the United States.
But power firms are likely to remain heavy users of natural gas through the remainder of the cooling season and again when heating demand picks up, underscoring natural gas’s critical role in the U.S. power system, even as renewables capacity continues to climb at a record pace.
The opinions expressed here are those of the author, a columnist for Reuters.
Reporting By Gavin Maguire; Editing by Sonali Paul
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