Association report confirms natural gas dominance in U.S. capacity mix

A recently released update to a report issued by the American Public Power Association on America’s generation capacity confirms the dominance of natural gas, accounting for over 43 percent of all generation capacity, with coal contributing just over 23 percent of capacity.

Nuclear, hydro, and wind together account for nearly one-quarter of capacity, the report said, while solar currently constitutes 2.6 percent of all capacity.

The report, “America’s Electricity Generation Capacity 2018 Update,” which was prepared by Paul Zummo, Director, Policy Research and Analysis, at the Association, analyzes prospective generation capacity in four categories — under construction, permitted, application pending, and proposed.

Over 348,000 MW of new generation capacity is under development in the United States with 97,575 MW under construction or permitted, and 250,746 MW proposed or pending application, the report said.

Most of the capacity currently under construction or permitted will be fueled by natural gas. Solar and wind together account for nearly one-third of near-term potential capacity additions. Natural gas, solar, and wind projects account for 92 percent of all capacity under construction, and would bring 44,844 MW online.

Regionally, the Southeast currently has the most generation, with 25 percent of the nation’s total capacity. However, the Western region is slated to add the most generation in the long-term, projecting nearly 94,000 megawatts of new capacity.

The report also provides information on retirements and planned retirements, cancellations, and capacity that has been added over the past eight years.

The overall capacity mix continues to change at a gradual place. Few coal plants are scheduled to come online in future years, with a total of 2,559 MW permitted or under construction, yet the past year saw 11,417 MW of coal-fired capacity proposed. Wind, solar, and other forms of renewable generation continue to be developed. Natural gas continues to be the most popular fuel choice due to costs and efficiency considerations.

Capacity figures cited in the report represent utility-scale capacity only, and do not include distributed and other small-scale generating capacity.

The report demonstrates the continued trend of natural gas being chosen as the predominant fuel for new utility-scale capacity developed in the U.S. Though wind and solar have climbed steadily in recent years, they both continue to trail natural gas in the amount of capacity additions, as well as for plants under construction or nearing construction.

“Despite the halting or cancellations of several proposed nuclear projects, several other nuclear projects remain online, and other permitted projects will add to nuclear capacity in the future,” the report noted. “There continues to be a dearth of new coal capacity, though there is a significant increase in the amount of ‘proposed’ new coal capacity compared to last year’s report,” the report said.

While almost no coal capacity was listed in the proposed capacity a year ago, over 11,000 MW of new coal capacity was proposed in 2017. Since proposed plants are the least likely to be built, “it will be worth keeping an eye on this capacity to see if there has been a sudden shift in the view of coal as a resource for electric generation in the future,” the report said.

“Though there may be unexpected shifts in legislative and regulatory attitudes, not to mention fuel prices, the outlook for electric generating capacity remains remarkably consistent,” the report went on to say. A supply mix dominated by natural gas, paired with an increasing share of solar and wind, should be expected for some time to come, the report said.