In the United States, natural gas consumed by electric power plants (power burn) set a daily record high of 47.2 billion cubic feet (Bcf) on Monday, July 27, according to S&P Global Platts estimates. Consequently, on the same day, natural gas-fired generation in the Lower 48 states also reached an all-time high of 316 gigawatts (GW) in the late afternoon, according to the U.S. Energy Information Administration’s (EIA) Hourly Electric Grid Monitor.

Before July 27, 2020, the record for U.S. natural gas power burn to generate electricity stood at 45.4 Bcf, and it was set on August 6, 2019. Natural gas power burn exceeded 45.4 Bcf per day on seven days in July 2020 and one day in August. Electricity demand in response to high summer temperatures throughout much of the country, relatively low natural gas prices, the start of new natural gas-fired capacity, and greater use of existing natural gas-fired capacity have contributed to increased natural gas consumption in the electric power sector.

Natural gas priced at the benchmark Henry Hub in Louisiana averaged $1.73 per million British thermal units (MMBtu) for natural gas delivered on July 27, according to Natural Gas Intelligence. From June 1 to July 30, Henry Hub prices averaged $1.64/MMBtu, 30% lower than the prices during the same period in 2019. Adjusted for inflation, this average price is the lowest average price for this period since at least 1993, the earliest data in Natural Gas Intelligence’s daily price series.

Of the electricity generated on July 27 in the Lower 48 states, natural gas held the largest share at 45%, followed by coal with a 24% share. Remaining shares included nuclear at 17%, renewable energy at 12%, and other sources at 3%.

Natural gas is a key power generation resource because it has the flexibility to supply electricity at any time, including at times of peak demand. In contrast, some renewable energy technologies and nuclear power plants may be nondispatchable and not able to adjust their generation to meet load. For example, nuclear power plants may already be running at or near maximum capacity and may be unable to respond to shifts in load.

The U.S. electric power sector has been moving toward more natural gas-fired and renewable-powered generation and away from coal-fired and nuclear-powered generation during the past several years. For example, between 2011 and 2019, 103 coal-fired power plants with a total of 22.2 GW of capacity were replaced by or converted to natural gas, primarily in the eastern half of the country.

From January 2019 through May 2020, the United States added 13.8 GW of new natural gas-fired net summer capacity and retired 5.4 GW. The net change of 8.4 GW is second only to the 12.6 GW added for onshore wind turbines since January 2019, according to EIA’s Preliminary Monthly Electric Generator Inventory.

Combined-cycle power plants have generated most of the new natural gas-fired capacity, using the latest high efficiency natural gas turbine technology. The retired natural gas-fired plants were less efficient steam plants or combustion turbines. This change has allowed the fleet of natural gas-fired generators to provide more electricity for a given level of natural gas consumption.