U.S. Natural Gas Sets Records for Generation, Price Volatility

By Christian Roselund

The United States hit a new record for daily generation of electricity from gas in July, amid U.S. natural gas prices that are among the most volatile in 20 years. The U.S. Department of Energy (DOE) has reported a new record of 6.37 terawatt-hours of electricity generation from gas in the continental United States on 21 July 2022. This follows two other records set on 18 July and 20 July 2022.

The agency credits above-average temperatures, lower levels of generation from coal for strong demand from gas-fired power plants throughout July. July 2022 was the third-hottest on record in the United States.

Separately, DOE finds that during February 2022 the 30-day measure average of daily price changes in gas prices averaged 179%, the highest it has been in 20 years. Despite this high volatility the average price in February 2022 was only $4.46 per million British thermal units (MMBTu) but has increased to $7.19/MMBTu in July 2022. July saw 109% volatility in daily gas prices.

Both the higher gas prices and the increased volatility are factors that work against the business case for new gas-fired power plants, and in favor of wind and solar as zero marginal-cost forms of generation.

Source: U.S. natural gas price saw record volatility in the first quarter of 2022 (Today in Energy – Energy Information Administration)

Source: Daily U.S. electricity generation from natural gas hit a record in mid-July (Today in Energy – Energy Information Administration)