May 12, 2021 Read More →

EIA: Renewables expected to pick up slack this summer for higher-priced gas

S&P Global Platts ($):

The US Energy Information Administration May 11 lowered its forecasts for natural gas production for the remainder of 2021, even as it expected growing LNG exports and domestic consumption would help push Henry Hub spot prices higher.

EIA expects renewable sources will provide 28% of Texas’s electricity demand this summer, up from 21% in 2020, meaning renewables are likely to be the primary replacement for high-cost natural gas in Texas.

In the Central region, EIA expected renewables would account for 36% of total summer 2021 generation, up from 31% the prior summer. Non-hydro renewables were forecast to generate more power this summer across all regions, mostly because of new capacity installed over the past year.

Overall, EIA expected gas-fired generation to be dispatched less often this summer, while coal plants are dispatched more frequently.

“We forecast US electric power sector generation from natural gas during the summer of 2021 will total 420 billion kWh, accounting for 37% of total generation and down from 42% last summer,” the summer outlook said.

EIA forecast coal’s share to rise to 26% in summer 2021 from 22% in 2020.

[Maya Weber]

More: US EIA trims natural gas production forecasts, sees lower gas use for power this summer

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