Gas demand for power generation peaked as early as 2010. CEPS Commentary, 12 February 2016

Genoese, Fabio and Drabik, Eleanor and Egenhofer, Christian. (2016) Gas demand for power generation peaked as early as 2010. CEPS Commentary, 12 February 2016. [Policy Paper]

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Abstract

The outlook for natural gas demand is often considered bright, especially for gas used to generate electricity. This is because gas is the cleanest of all fossil fuels. The carbon intensity of modern gas-fired power stations is less than 50% that of modern coal plants. Moreover, gas-fired units are well-suited to follow rapid swings in supply and demand due to their flexibility. In the future, these balancing tasks will become more and more important given the intermittent character of the supply of wind and solar power. Gas seems to hold out the promise of being a key pillar of the energy transition and the perfect partner of renewables. Given the EU’s long-term climate policy goals, however, there is strong evidence that demand for gas for purposes of power generation peaked as early as 2010.

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