The U.S. Energy Information Administration (EIA) recently reported that the U.S. natural gas-fired power generation sector is projected to grow by more than 36 gigawatts (GW) over the next two years. According to the report, if all of the projects advance to completion, natural gas capacity additions would be at their highest level since 2005. Through November 2016, natural gas-fired capacity generation was at 511,850 megawatts, representing 43.4% of total generation.

The growth in natural gas-fired power generation projects is fueled by retirements and closings of coal-fired power plants, due to costs to comply with federal and state environmental mandates, as well as low natural gas prices, averaging $2.51 per million British thermal units (MMBtu) in 2016 and expected to rise to $3.73/MMBtu by 2018. For related information, see January 10, 2017, article - EIA: U.S. Coal Production in 2016 Drops to Lowest Level in Nearly 40 Years.

Currently, Industrial Info is tracking 180 natural gas-fired power projects valued at more than $91 billion in the U.S.

The market regions with the most natural gas-fired power projects are the Southwest, with 41 projects valued at $23.1 billion; the Great Lakes, with 29 projects valued at $20.4 billion; the Northeast, with 28 projects valued at $14.9 billion; and the Mid-Atlantic, with 17 projects valued at $10.8 billion. Also noteworthy in North America is Mexico, which has 41 natural gas-fired projects valued at more than $24 billion.

Power generation projects in the states of Ohio and Pennsylvania have an advantage due to their proximity to the Marcellus and Utica shale formations, which have increased production as a result of hydraulic fracturing technology.

Also, the heavy-frame combustion turbine market is expected to increase at an annual growth rate of about 4% by 2021 to $20.5 billion due to improved efficiencies, equipment durability, stricter carbon emissions regulations and lower power generation costs.

General Electric's (NYSE:GE) (Fairfield, Connecticut) Power & Water Division, one of the largest combustion turbine manufacturers in the world, estimates that more than $5 trillion will be spent on new power generation plants globally over the next 10 years, with new power generation installed costs now within the $500- to $700-per-kilowatt range.

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