Natural gas-fired power

Tracking Clean Energy Progress

🕐 Last updated Wednesday, 23 May 2018

More efforts needed

In the SDS, gas grows as a flexible transition fuel until late 2020s, displacing coal, but declines steadily after. Growth in gas-fired power generation slowed down to 1.6% in 2017, as lower generation in the U.S. offset growth around the world. The 2017 trajectory is off track with this SDS trajectory.


Evolution of gas power generation in the SDS

Gas generation grows until 2027 as unabated coal drops and low-carbon sources take off

	Low-carbon	Gas	Coal
2000	5459	2753	6005
2001	5461	2907	6024
2002	5581	3109	6309
2003	5586	3270	6722
2004	5899	3513	6950
2005	6096	3702	7335
2006	6277	3912	7746
2007	6306	4220	8207
2008	6525	4376	8258
2009	6634	4423	8099
2010	7017	4822	8664
2011	7067	4883	9142
2012	7262	5086	9180
2013	7611	5027	9633
2014	7940	5159	9698
2015	8166	5519	9532
2016	8632	5850	9282
2017	9130	5996	9198
2025	14155	6903	6575
2030	18713	6950	4472
2035	23518	6283	3055
2040	28009	5585	2195
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Gas-fired generation growth slowed down to 1.6% in 2017, mainly driven by a decline of 7.6% in the United States, which saw an increase in gas prices. In the rest of the world, generation grew by 4.6%, led by China, the European Union and Southeast Asia.

In the European Union, where gas-fired power had suffered in recent years, gas generation increased strongly in 2017 (12.3% or 78 TWh). This happened at the expense of coal because of low gas prices, the EU Emissions Trading System carbon price as well as only moderate growth in renewables generation.

Gas generation increased strongly in China (17.2%), India (13.3%) and Southeast Asia (6.3%) in 2017 as well, however from much lower bases. Generation growth was driven by healthy electricity demand growth and measures to reduce local air pollution.

By contrast, 2016 was a remarkable year: gas-fired power generation increased by almost 6%, well above the historical average growth of 4.7% between 2000 and 2015. Gas-fired power generation benefited as oversupply lowered gas prices in key regions. In addition, carbon price signals in several jurisdictions created room for gas in the supply mix at the expense of coal.

Investment

Investment in gas-fired power rose by nearly 40% in 2017, led by the United States and the Middle East/North Africa region.

Despite the positive trend in generation, final investment decisions for new gas-fired power plants capacity fell to 50 GW in 2017, the lowest in over a decade. This slowdown reflected a decline in projects in the United States and the Middle East, as well as challenging conditions in markets with persistently low wholesale power prices, such as Europe. Nevertheless, final investment decisions for gas were more than one-and-a-half times those for coal.


Tracking progress

Gas generation growth is well above the overall SDS growth trajectory, which should see a peak in 2027 and declines steadily after that. Gas generation emits less CO2 than coal generation, so when gas displaces coal, as it did in the United States and the European Union in 2016, it can deliver immediate emissions reductions.

Gas is also facing fierce competition from cost-competitive renewables. As the lower-carbon alternative to gas, renewables lead generation growth in the SDS at the expense of gas.

Growth prospects for gas will be affected not only by the competitiveness of gas prices but also by recognition of the benefits of gas compared with coal for local air pollution and the climate. To ensure that investment continues and that gas can meet the ambitions set out in the SDS scenario, security of gas supply will be critical.

Capacity factor by region/country and year

Gas capacity factors rose quickly in China but declined in other places.

	2015	2016	2030
United States	34	35	38
Japan	57	56	43
China	27	34	47
Middle East	40	41	43
European Union	26	33	30
Russia	49	50	45
Southeast Asia	50	48	51
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Innovation

Improving flexibility and increasing full load efficiency will continue to be the research priorities for gas-fired power generation.

Flexibility of gas generators is particularly important to facilitate the integration of growing shares of variable renewables into the grid. Boosting flexibility and encouraging its use requires improving not only power plant technology but also system operations, market design, the granularity of pricing and the access of revenue streams for system services.

With ample cheap gas available, for instance in the United States, full load efficiency remains an important plant parameter.

Research, development and demonstration (RD&D) should also be directed towards CCUS for gas-fired power generation. Like unabated coal, unabated gas is likely to be too carbon-intensive to reach ambitious climate targets beyond 2040.


The IEA’s new Innovation Tracking Framework identifies key long-term “technology innovation gaps” across the energy mix that need to be filled in order to meet long-term clean energy transition goals. Each innovation gap highlights where R&D investment and other efforts need improvement.

Explore the technology innovation gaps identified for gas-fired power below:

Why is this RD&D challenge critical?

Existing gas power capacity is not optimised for the flexibility requirements of systems with higher shares of variable renewables.

Key RD&D focus areas over the next 5 years

Explore technical options for retrofitting gas fired power plants and assess their economics against other flexibility options.

Key initiatives

  • MHPS and GE Power have reached 64% net efficiency with highly flexible operation.
  • • Retrofits to existing plant for greater flexibility increasingly available (e.g. Emerson/Ovation turbine control retrofits), as well as high-cycle capability turbines (e.g. Siemens' aeroderivative A45 gas turbine).

Why is this RD&D challenge critical?

Hydrogen produced from excess power during periods of abundant generation from renewables could play a key role in power systems.

Key RD&D focus areas over the next 5 years

Increase activity and utilisation, or fully avoid the use of platinum; direct R&D to increase durability and reduce degradation of fuel cell mechanisms (e.g. self-healing membranes for polymer-based systems).

Key initiatives

US DOE's Fuel Cell Technologies Office call for USD 39 million in total focuses funding in three areas: Accelerating the development of PGM-free catalysts and electrodes, hydrogen infrastructure at scale, and innovative concepts including reversible and liquid fuel cell components.

Why is this RD&D challenge critical?

Potential for hydrogen use at a larger scale, including injection of power in the electricity grid from long-term hydrogen storage.

Key RD&D focus areas over the next 5 years

Explore technologies that provide enhanced material capabilities, reduced air cooling and leakage, and higher pressure ratios than conventional turbines. This includes improved cooling (internal surface cooling, airfoil surface cooling with film cooling), improved sealing (e.g. modelling sealing and stability digitally), develop rotor rim geometry concepts to maintain aerodynamic efficiency.

Key initiatives

  • Extant DOE Advanced H2/IGCC gas turbine programme.
  • NETL Hydrogen Turbine Program, 3100 F Hydrogen turbine goal, transformational H2 production.

Explore all 100+ innovation gaps across 38 key technologies and sectors here.