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Gas generation down across US West this spring as renewable capacity grows


Power burns down 260 MMcf/d spring 2022 vs. 2021

8.1 GW of renewable capacity installed over past year

Commerce tariff investigation could slow solar growth

  • Author
  • J Robinson    Kassia Micek
  • Editor
  • Joe Fisher
  • Commodity
  • Electric Power Energy Transition Natural Gas

Recent growth in renewable generating capacity across the Western US is putting downward pressure on gas-fired power burns this spring in a trend that's only likely to accelerate in the years ahead.

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Since the start of April, gas demand from power generators across the desert southwest, California and the Pacific Northwest has averaged just under 3.3 Bcf/d – down about 260 MMcf/d, or more than 7%, compared with the same eight-week period in 2021, data from S&P Global Commodity Insights shows.

The drop in gas-fired power demand appears to be uncorrelated with the weather. This spring, population-weighted temperatures in California, Nevada, Arizona and New Mexico, which account for the vast majority of western power burns, have averaged an estimated 64.6 degrees Fahrenheit, nearly identical to the 2021 average at 64.4 degrees.

In 2022, California and the desert southwest have seen lower burns across the board, regardless of temperature. Scatterplot data comparing year-to-date power burn samples from 2022 and 2021 shows a roughly 250 MMcf/d drop in the average burn rate this year compared with last.

This year's drop in power burn demand comes after steady annual gains in generator demand across the West in the three years prior and is likely the result of continued additions in renewable capacity.

Capacity additions

In just the past year, California, Nevada, Arizona and New Mexico have added a combined total of 8.1 GW of renewable capacity in the form of wind, solar and battery power, S&P Global data shows.

In California alone, there is now over 26 GW of installed renewable generating capacity as of the end of April, according to the California Independent System Operator's Key Statistics report published May 10.

Over the past two years, the West has seen a major push to add generating capacity across the region following the 2020 rotating power outages, ongoing drought conditions and extreme temperatures, which have strained supply and boosted summer cooling demand.

Last August, the California Energy Commission approved two orders to comply with Governor Gavin Newsom's emergency proclamation to reduce strain on energy infrastructure and ensure increased clean energy capacity due to projected shortfalls of 3.5 GW in 2021 and 5 GW in summer 2022. CAISO was counting on a significant addition of storage to help ease tight supply, but supply chain issues mean that likely won't materialize by this summer.

With insufficient storage to capture excess renewable generation, solar and wind power curtailments have risen to record levels, reaching a new all-time high of 596.175 GWh in April, surpassing the previous record by 29%.


Looking ahead, ongoing additions to renewable capacity in California and the Southwest will likely continue to weigh on gas-fired power burns in the region.

Over the next year, developers plan to add nearly 7 GW of renewable power in California, Nevada, Arizona and New Mexico. With about 70% of that capacity expected in the form of solar power, supply chain challenges and an ongoing solar tariff probe could mean the final installed capacity over the next year falls short of that number.

Earlier this year, the Solar Energy Industries Association published a report showing far-reaching impacts on the US industry after the US Commerce Department announced an investigation into possible import tariff circumvention by solar manufactures in Southeast Asia.

Published survey responses showed 75% of SEIA's 200 respondents reported recent cancellation or delay of their photovoltaic module supply as a result of the investigation.

The probe targets Chinese PV manufacturers purportedly evading tariffs by setting up shop in Cambodia, Malaysia, Thailand and Vietnam, which together account for about 84% of all US solar modular imports, according to SEIA.