EIA Sees U.S. Gas-for-Power Flat in 2026 as Solar Absorbs Texas Grid Records
ERCOT's July peak of 91 GW was met one-third by solar, limiting gas generation's gain even as total electricity demand climbs 2% and a record year is forecast for 2027.
NYMEX Henry Hub front-month was trading at $2.83/MMBtu on Friday (2026-09-11) as U.S. gas traders absorbed a summer in which ERCOT broke its all-time peak load record on July 22 (2026-07-22) yet natural gas generation stayed near flat — exactly as EIA had projected in its May Short-Term Energy Outlook.3,78
ERCOT hit 91.089 GW at 6:00 p.m. CT on July 22 (2026-07-22), according to EIA data, topping the previous record of 85.508 GW set on August 10, 2023 (2023-08-10) by 6%. Before that, the mark had stood at 80.148 GW, set on July 20, 2022 (2022-07-20). The grid has added roughly 11 GW of peak capacity over four years.7,8
But gas captured only half of it. At the July 22 (2026-07-22) peak, natural gas supplied 48% of ERCOT generation and solar provided 32%, according to EIA-930 hourly data. That solar share at a summer peak hour reflects a generation mix that has shifted sharply in three years. EIA projects ERCOT solar output will reach 78 billion kilowatt-hours in 2026, against 60 billion kWh for coal across the same grid.7,1
Southwest Power Pool followed on July 27 (2026-07-27), setting its own record at 57.9 GW at 5:00 p.m. CT. Multiple grids are hitting new peaks this summer; gas is covering a smaller share of each one than in previous summers.7
EIA's May STEO attributed the flatness in gas-fired generation to a 2% rise in overall electricity demand being partially offset by renewable build. The agency put the record for U.S. gas-fired power generation in 2027, not 2026. Total U.S. electricity consumption hit 4,195 billion kilowatt-hours in 2025, and EIA's latest Short-Term Energy Outlook forecasts 4,269 billion kWh in 2026, rising to 4,399 billion kWh in 2027, with AI data center load among the drivers. EIA's Annual Energy Outlook 2026 estimates data center servers already accounted for 7% of commercial-sector electricity in 2025.3,61
Supply is rising in parallel. U.S. marketed natural gas production averaged 120.2 Bcf/d in the first quarter of 2026, up 4% from the year-earlier period, with associated gas output growing alongside crude oil drilling, EIA reported. Morgan Stanley expects Lower 48 supply to grow by roughly 3 Bcf/d this year.2,4
Gas markets are caught between those two trends. Oil & Gas 360 described a split in which bulls cite rising LNG exports, growing power demand, and geopolitical disruptions as supports through the rest of 2026, while bears argue accelerating production overwhelms those tailwinds in 2027. Neither side disputes the demand trajectory; they disagree on the supply response.4
Capital commitment has not stalled. U.S. companies are on track to spend some $50 billion on coal and natural gas power generation this year, the IEA said as quoted by the Financial Times — the first time in decades that investment at that scale has gone into fossil fuel generation. In the first quarter of 2026 alone, U.S. companies ordered some 20 GW of new gas turbine capacity, according to the IEA.5
Whether the 2027 gas-for-power record materialises as EIA expects depends in part on how much of the next demand wave solar can absorb at peak hours. At ERCOT's July 22 (2026-07-22) record peak, solar held a 32% share. New contracted capacity coming online through 2027 could push that share higher still, leaving gas with a growing total market but a shrinking role during the specific hours that set the records.3,7