U.S. Gas-Fired Power Demand Flat This Summer, Set for a 2027 Record as Capital Pours In
EIA projects record U.S. natural gas power burn in 2027, but a supply surge and summer displacement by renewables are keeping NYMEX Henry Hub near $2.65/MMBtu.
NYMEX Henry Hub front-month settled at $2.65/MMBtu on Tuesday (2026-07-29), near its summer floor, even as Asian power markets face tightening supply conditions. China's electricity consumption is forecast to grow 5.5% this year and India's by 7%, Asian Power reported on Saturday (2026-07-26), squeezing import-dependent markets with higher LNG costs and supply disruptions.7
That Asian demand has a direct U.S. supply implication. JKM stood at $21.32/MMBtu on Tuesday (2026-07-29), roughly eight times the concurrent NYMEX Henry Hub front-month level, keeping the Atlantic LNG arbitrage wide open and sustaining U.S. export volumes that remove gas from the domestic market before it reaches power generators.7
At home, the demand picture for gas-fired power is subdued for now. The EIA's July Short-Term Energy Outlook, published in early July (2026-07-02), forecast U.S. wholesale electricity prices averaging $45/MWh this summer, down $4/MWh from last year. Natural gas-fired generation is expected to stay roughly flat despite overall U.S. electricity demand rising 2%, with renewable additions absorbing most of the load growth.6,3
Flat burn this summer, a record next. The EIA's May Short-Term Energy Outlook (published 2026-05-28) projected U.S. power sector gas consumption would hold near recent highs through the current summer before setting a record in 2027. The convergence of growing LNG export capacity, industrial expansion, and AI-driven data center loads explains the gap between now and then.3,4
The EIA's Annual Energy Outlook 2026 estimated data center servers accounted for 7% of U.S. commercial sector electricity consumption in 2025, with that share projected to reach between 22% and 33% of commercial building electricity use by 2050, and server consumption alone potentially reaching between 446 billion kWh and 818 billion kWh annually by that point.2 Industrial gas consumption also set a record in 2025, averaging 23.6 billion cubic feet per day, 1% above the prior record of 23.4 Bcf/d from 2023, per EIA data. Power-sector gas competes with industry for those same molecules.2
The capital response has been rapid. The IEA estimated U.S. companies would spend roughly $50 billion on coal and gas power generation in 2026, which would be the first time in decades that U.S. fossil power investment exceeded China's by volume, with the gap put at $3 billion, as reported by the Financial Times.5 The IEA counted approximately 20 GW of U.S. gas turbine orders in the first quarter of 2026 alone, representing around 40% of global orders during that period, with European buyers accounting for another 35%.5
But capacity additions take time. An unnamed company chief executive said the firm was targeting a 30% increase in production capacity and acknowledged that would still be insufficient to meet demand.5 Delivery schedules, not current gas prices, may set the pace of how quickly that capacity reaches ERCOT and MISO grids.
Supply provides the near-term counterweight. Morgan Stanley expects Lower 48 production to grow by roughly 3 Bcf/d through 2026, recovering from spring 2026 maintenance disruptions.4 That growth underpins the bearish 2026 case and is why consensus among MISO and ERCOT participants sits entirely on the sell side heading into August.
China's thermal generation data complicates the Asian demand story. Official figures published in mid-May (2026-05-15) showed China's thermal power output, which comes overwhelmingly from coal with gas contributing a small fraction, rose 1.5% in 2024 to 6.34 trillion kWh, the slowest growth rate in nine years outside the COVID period but still positive, defying earlier analyst expectations of a peak.1 Greenpeace analysts had projected in 2025 that renewables could absorb all of China's incremental power demand growth; the 2024 thermal output figures suggest that did not fully occur.1
The 2026-versus-2027 split in U.S. gas markets is increasingly clear. Near-term, 3 Bcf/d of new production and renewable absorption of load keep gas-fired power flat. Longer-term, the 20 GW of turbine orders placed in the first quarter of 2026 will come online into a market where LNG export capacity and data center loads have both grown substantially. How much of that demand the current supply growth rate can absorb, before new turbines arrive in volume, is what the 2027 NYMEX Henry Hub forward strip is pricing in real time.4,5