Gas in the grid: share, coal, renewables and data centers

Natural gas has been the largest source of US electricity since 2016. In 2025 it supplied about 41% of utility-scale generation, per EIA, out of about 4.43 trillion kWh. Nuclear supplied about 18%, coal about 17%, and renewables together about 24% (wind about 11%, solar about 7%, hydro about 6%). Fossil fuels combined were about 58%.

Share by year

Year	Gas share	Coal share	Source note
2000 to 2008	well below coal	about 50%	EIA Today in Energy, 2016
2015	about one-third	about one-third	EIA Today in Energy, 2016
2016	33% (forecast)	32% (forecast)	EIA March 2016 outlook: first annual crossover
2023	43.1%	16.2%	EIA, preliminary
2025	about 41%	about 17%	EIA Energy Explained

Note the dip from 2023 to 2025. EIA reported that in 2025 gas lost some generation share to coal, solar and wind, partly because gas prices rose from their 2024 lows. Coal also still beats gas in some winter months in the Southwest Power Pool and MISO regions, where old coal plants compete when gas gets expensive. Share moves with fuel prices, in both directions.

Why gas replaced coal

Several things lined up after 2008.

First, price. Shale drilling flooded the market and pushed gas prices down hard from their mid-2000s highs. EIA notes that coal won back some share in 2013 and 2014 when gas prices rose, which tells you how price-driven the switch was.

Second, efficiency. A modern combined-cycle plant turns about 45% of the fuel's energy into electricity, versus about 34% for the average coal plant (lesson 3 has the heat rates). Cheap gas burned in an efficient plant beat old coal on cost per MWh.

Third, rules and age. Air rules on mercury, sulfur dioxide and fine particles required expensive retrofits at older coal plants, and many units built in the 1960s and 1970s were near the end of their lives anyway. EIA notes that nearly all coal capacity in SPP and MISO came online before 1990, while much of the gas fleet dates from 2000 on.

Coal plant owners and coal-state officials have argued that rules, not markets, drove many retirements. Environmental groups argue the opposite: that cheap gas and renewables did most of the work. The fair reading of EIA's data is that price came first and rules sped up retirements of plants already losing money.

What gas does next to wind and solar

On a grid with lots of solar and wind, gas does several jobs at once.

• Baseload and load-following. Combined-cycle plants ran at a 60.5% capacity factor in 2024. They run most hours and adjust output up and down through the day.
• Evening ramp. As solar drops off around sunset and people come home, demand on other sources climbs steeply. Fast gas units and batteries share that ramp.
• Peaking. Simple-cycle turbines (13.9% capacity factor in 2024) run on the hottest and coldest days.
• Multi-day firming. A week of still, cloudy winter weather outlasts a four-hour battery. Gas plants are the main resource most grid operators count on for that today. The debate lesson weighs how long that will last.

Data centers and the new gas rush

For about 15 years, US electricity demand barely grew. That ended. LBNL's 2024 report estimated data centers used about 176 TWh in 2023, 4.4% of US consumption, and projected 325 to 580 TWh by 2028, or 6.7% to 12% of the total. The range is wide because nobody knows how fast AI chips will be deployed or how efficient they will get. EIA's October 2026 outlook has total US generation rising from 4,309 billion kWh in 2024 to a forecast 4,613 billion kWh in 2027, and it expects commercial sector demand, which includes data centers, to keep growing.

Utilities and developers responded by announcing gas plants. One example: in August 2025, the Louisiana Public Service Commission approved Entergy Louisiana's plan for three gas plants, described as about 2.3 GW, to serve Meta's Hyperion data center in Richland Parish, which Meta has said could use up to 5 GW at full build-out. Entergy also committed to procure up to 1.5 GW of solar. Supporters said the project brought investment that would otherwise go to another state. Opponents argued ordinary customers would end up paying for plants built for one company. Both arguments show up in nearly every data center gas fight.

The backlog has side effects worth watching. Turbine prices and construction costs have risen, which feeds into the cost of every new plant and into customer rates. Some developers have turned to aeroderivatives, reciprocating engines or refurbished used turbines for on-site data center power because they can get them sooner. And some utilities have kept older coal and gas units running past planned retirement dates to cover demand while they wait.