Surging solar generation continues to pressure power sector gas demand in June

US power sector gas demand was lower year over year in June as a surge in solar generation this year continues to squeeze out some fossil fuel generation.

Gas demand from electric power stations was 40.4 Bcf/d in June 2025, down from the record 41.4 Bcf/d in June 2024, according to data from S&P Global Commodity Insights.

This was the third time in four months that power sector gas demand has been weaker year over year, reversing a trend of strong increases in the past few years, Commodity Insights data showed. A jump in solar generation, flattish total power demand and stiffer competition from coal have been behind the decline.

These trends all continued in June. Solar generation rose by almost 220 GWh/d, or around 29%, year over year in June, preliminary data from the US Energy Information Administration's Hourly Electric Grid Monitor showed. The data is based on hourly net generation reported by local and regional balancing authorities, so it excludes some distributed resources, according to the EIA website.

Power demand was almost flat, edging up by less than 1% year over year, the data showed. Despite a sweltering heatwave in the Northeast towards the end of the month, which supported regional power-sector gas demand and spot gas prices, June 2025 was generally cooler than June 2024. Population-weighted average temperatures were 75 F (23.9 C) during June, around 1.1 F lower year over year but 0.5 F higher than the ten-year average, Commodity Insights data showed. Even in the Northeast, temperatures were on average 1.4 F lower year over year during June, the data showed.

With demand flat, the surge in solar cut into the fossil-fuel share of the power mix. And within fossil fuels, coal has become somewhat more competitive this year amid rising natural gas prices.

The Henry Hub cash price averaged $2.98/MMBtu for June 2025 flows, in June, compared with $2.45/MMBtu a year earlier, according to data from Platts, a part of Commodity Insights.

Coal-fired generation in June rose around 50 GWh/d, or 2%, year over year, the EIA data showed.

Outlook

Looking ahead, power sector gas demand could remain weaker year over year in the first half of July as average US temperatures are forecast to be close to normal, Commodity Insights data showed.

Power sector gas demand is forecast at an average of 44 Bcf/d during July 2-15, which would be almost 7 Bcf/d lower than in the same period of 2024, Commodity Insights data showed.