Sign In

Error
Error
Create an account

Create a free IEA account to download our reports or subcribe to a paid service.

Join for freeJoin for free

Natural Gas-Fired Power

More efforts needed
Shutterstock 1125665873

In this report

Natural gas-fired power generation contracted 2% in 2020 but is expected to increase 1% in 2021. At ~6 300 TWh, gas fuelled 24% of total global power generation in 2020. In the Net Zero Emissions by 2050 Scenario, unabated gas-fired generation continues its growth in the short term, displacing coal-fired generation, but starts falling by 2030 and is 90% lower by 2040 compared to 2020. Increasingly, existing gas-fired power plants will need to be retrofitted with CCUS or co-fired with low-carbon fuels such as hydrogen to be consistent with Net Zero Scenario levels.

Gas-fired generation in the Net Zero Scenario, 2010-2040

Openexpand
Tracking progress

Power generation from natural gas decreased 2% in 2020. In the United States, the share of gas-fired generation in the power mix dropped from its 44% peak in July 2020 to 35% at the end of 2020, set off by gas-to-coal switching as gas prices rebounded after their Covid-19 lows of less than USD 2/MBtu in July 2020. Higher renewables-based generation also contributed to the decline.  

While an overall 1% rise is anticipated globally for 2021, gas-fired generation in the European Union was significantly higher (+20%) in the first five months of this year than in the same period in 2020. Meanwhile, in the United States the share of gas in generation remained between 33% and 34% during this period.  

In the Net Zero Emissions Scenario, unabated gas-fired generation expands in the near term as it replaces coal but starts to decline in the late-2020s. By 2030, unabated gas accounts for roughly 17% of total electricity generation as the renewable energy share increases to over 60%. By 2050, the share of unabated natural gas in the power mix falls to just 0.4%. 

Investment decisions for gas-fired plants edged down in 2020, largely due to a considerable reduction in final investment decisions in the United States, which more than offset growth in Asia (excluding China and India). 

Global interest in CCUS power generation projects is growing. Of the over 40 currently under development, nearly 15 involve gas-fired generation and are primarily in the United States and the United Kingdom.  

Among the projects in development are plans to demonstrate new technologies for gas-fired power generation with CCUS. NET Power’s Allam cycle technology uses CO2 as a working fluid in an oxyfuel supercritical CO2 power cycle, producing a relatively pure CO2 stream at a significantly lower capture cost. Following demonstration of a 50MW plant in Texas, NET Power is now developing multiple commercial-scale facilities.  

Although momentum is strong, only one power plant is operating with CCUS today (the coal-fired Boundary Dam project in Canada) and no gas-fired CCUS projects are in operation. Nevertheless, the Net Zero Emissions by 2050 Scenario envisions ~170 TWh of generation from CCUS-equipped gas plants by 2030. 

CCUS technologies can reduce emissions across the gas value chain, but development in gas-fired power has been slow.  

Until the 2000s, virtually all the CO2 captured at large-scale facilities came from gas processing facilities. Today, two-thirds of global capture capacity involves gas processing. This includes projects linked to LNG facilities, and several more are in development. For example, in March 2021 NextDecade announced that its yet-to-be-sanctioned Rio Grande LNG project in the United States would capture up to 5 Mt CO2 per year, reducing its CO2 emissions by more than 90%. 

Progress in deploying CCUS for gas-fired power plants has been slower, even though CCUS-equipped gas-fired plants can help meet the growing need for system flexibility as the share of variable renewable energy in electricity generation increases. As dispatchable resources, gas-fired power plants with CCUS could provide important system balancing services. 

Of the gas-fired plant projects with CCUS currently under development, the vast majority are in the United States and the United Kingdom. Policies and funding support in both countries have encouraged this interest:

  • In March 2020, the UK government announced that it would support construction of the United Kingdom’s first gas-fired power station with CCUS using consumer subsidies. 
  • In April 2021, the US Department of Energy announced up to USD 75 million in funding for CCUS projects for power generation and industrial applications. One area of interest focuses on CO2 capture applications in natural gas combined cycle power generation.

Under the Net Zero Emissions by 2050 Scenario, gas-fired power plants are retrofitted to co-fire with hydrogen by 2025, as hydrogen can be used as a fuel in gas turbines as well as combined cycle gas turbines (CCGTs). Most existing gas turbine designs can already handle a hydrogen share of 3-5%, and some can handle shares of 30% or higher. 

  • In July 2021, Japanese utility JERA announced plans to demonstrate hydrogen co-firing technology at existing CCGT units in New York. Expected to begin in late 2022, the project will co-fire 5% hydrogen at the gas-fired plant.  
  • In Texas, US utility Entergy announced in August 2021 that it plans to seek approval for a 1.2GW CCGT facility that will co-fire up to 30% hydrogen. If approved, Entergy will begin construction in 2023, with the goal of starting operations in 2026. 


The future role of natural gas in low-carbon power systems will depend on whether upstream methane emissions are addressed. A number of jurisdictions are considering introducing regulations to incentivise lower gas industry GHG emissions.

Analysis