![US projected electricity generation by fuel [source: EIA Annual Energy Outlook 2017]](http://gastopower.co.uk/media/k2/items/cache/9319bba24c84d8d9edf402bf20ff8909_S.jpg)
Domestic consumption of natural gas in the US is expected to increase through 2040, driven by higher demand for power generation, according to the US Energy Information Administration (EIA).
Total natural gas consumption is expected to exceed 30 trillion cubic feet/year in 2040 under EIA's reference case, from around 28 Tcf/year in 2016.
Gas consumption for power generation would account for for almost a third of that.
“After a brief near-term decline attributable to strong growth in renewables generation and price competition with coal, natural gas used for electric power generation generally increases after 2020” the EIA said in its 2017 Annual Energy Outlook report.
In particular, the Clean Power Plan (CPP) and the scheduled expiration of renewable tax credits in the mid- 2020s result in an increase in the electric power sector’s natural gas use, it said.
The Reference case projection assumes trend improvement in known technologies, along with a view of economic and demographic trends reflecting the current central views of leading economic forecasters and demographers, the EIA explained. It generally assumes that current laws and regulations affecting the energy sector are unchanged throughout the projection period.
“Even if the CPP is not implemented, low natural gas prices and the tax credits result in natural gas and renewables as the primary sources of new generation capacity” the EIA added.
Meanwhile, natural gas consumption in the residential and commercial sectors remains largely flat “as a result of efficiency gains that balance increases in the number of housing units and commercial floor space” it said.
New installed capacity “split between solar and gas” after 2030
Looking at additional installed capacity over the projected period, the EIA estimated under its reference case that some 70 GW of new wind and solar photovoltaic capacity is to be added over 2017–21 “encouraged by declining capital costs and the availability of tax credits. “
In addition, continued retirements of older, less efficient fossil fuel units under the CPP “support a consistent market for new generating capacity throughout the projection period” it said, adding that “after 2030, new generation capacity additions are split primarily between solar and natural gas” (roughly 20 GW added per year from 2030 onwards), with solar capacity representing more than 50% of new capacity additions in the Reference case between 2030 and 2040.
Another key finding of the report is the role of the US as a net energy exporter over the projected period “in most cases” on the back of increased domestic production. Under the reference case, the US would become a net energy exporter by 2026.
Natural gas trade “which has historically been mostly shipments by pipeline from Canada and to Mexico” is projected to be increasingly dominated by liquefied natural gas exports to more distant destinations, the EIA added.