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January 26, 2023

In the past 20 years, natural gas has displaced most coal-fired generation in Pennsylvania

As of January 1, 2023, we are now publishing four new Today in Energy articles each week, from Monday through Thursday.

Pennsylvania, annual utility-scale electricity generation by source
Data source: U.S. Energy Information Administration, Electricity Data Browser

Natural gas-fired power plants generated 2% of the electricity produced in Pennsylvania in 2001. Over the next 20 years, natural gas-fired generation in the state increased rapidly, reaching 52% in 2021. Natural gas displaced most coal-fired generation, which fell from 57% of the electricity generated in Pennsylvania in 2001 to 12% in 2021.

Natural gas production has grown significantly in Pennsylvania over the past two decades, rising from 0.1 trillion cubic feet (Tcf) in 2001 to 7.6 Tcf in 2021, making the amount of natural gas produced in Pennsylvania second only to Texas. Pennsylvania sits on top of the Marcellus shale, and the portions of the Marcellus under Pennsylvania and West Virginia constitute the largest natural gas field in the United States. Although natural gas has been produced in the Marcellus for a long time, production from the Marcellus became much more economical after fracking and horizontal drilling were developed. The first Marcellus shale natural gas well using these techniques was drilled in Pennsylvania in 2004. At the same time that natural gas production in Pennsylvania was increasing, coal production was declining, falling 40% from 74.1 million tons in 2001 to 42.5 million tons in 2021.

Increased production in Pennsylvania and elsewhere in the United States made natural gas abundant and relatively cheap. With access to inexpensive natural gas, utilities and power plant operators began to close aging coal-fired power plants in Pennsylvania, many of which were built in the 1970s and 1980s, and to replace them with new natural gas-fired combined-cycle plants. Modern combined-cycle plants are more efficient than the typical coal-fired power plant, and they don’t have the same costs to comply with emissions regulations. As coal plants in Pennsylvania were retired and the remaining coal plants were used less, the share of Pennsylvania’s generation supplied by coal dropped.

Although coal’s generation share started declining in Pennsylvania in 2007, it remained the largest source of in-state electricity generation until 2015, when nuclear power surpassed coal. Pennsylvania is home to eight nuclear reactors at four nuclear power plants; the second-highest share of electricity from nuclear power plants is generated in Pennsylvania, more than any other state except Illinois. In 2019, the remaining reactor at Pennsylvania’s Three Mile Island nuclear power plant closed, and as a result, along with significant investment in new combined-cycle natural gas plants, natural gas consumption surpassed nuclear as Pennsylvania’s largest source of in-state electricity generation.

Most electric utilities and power plants in Pennsylvania participate in the PJM wholesale electricity market, which coordinates the electricity supply for all, or part of, 13 eastern states and the District of Columbia. To help ensure enough electricity is available to meet customer demand in the future, PJM holds capacity market auctions that pay plants so that they can be counted on to meet future demand. Availability of those payments was another, although smaller, contributing factor in the growth of natural gas-fired generating capacity in Pennsylvania.

You can find more information on state electricity generation sources in our State Energy Data System. You can also access this data through our Electricity Data Browser.

Principal contributor: Elesia Fasching