EIA Forecasts Flat Natural Gas Power Generation This Summer, Record Peak in 2027 Driven by Data Centers
According to Power Engineering, the U.S. Energy Information Administration’s May 2026 Short-Term Energy Outlook projects that natural gas consumption in the U.S. power sector will remain near recent highs this summer before hitting a new record in 2027, driven largely by data center and manufacturing expansion in Texas and Virginia.
Market Impact
The EIA forecasts natural gas consumption in the electric power sector will average 43.7 billion cubic feet per day (Bcf/d) during the summer months of June through September 2026, matching summer 2025 levels and running 4% above the five-year average from 2021 through 2025. Despite a 2% rise in overall U.S. electricity demand this summer, natural gas generation stays flat because renewables are absorbing much of the new load.
The bigger story is 2027. The EIA projects power sector natural gas consumption will climb 6%, or 2.4 Bcf/d, to reach 46.1 Bcf/d next summer, surpassing the previous record set in 2024 by 3%. New data centers and large manufacturing facilities, concentrated primarily in Texas and Virginia, are the primary driver. Commercial and industrial electricity demand in the West South Central region, which covers much of Texas, is forecast to increase 20% between summer 2025 and summer 2027. ERCOT is expected to meet that demand with a 22% increase in natural gas generation over the same period. In PJM, which covers Virginia and much of the Mid-Atlantic, natural gas generation for electricity is forecast to increase 6%, or 9 billion kilowatt-hours, in summer 2027 compared to summer 2025.
What It Means for Subcontractors
- Texas and Virginia are the hotspots. Field service companies focused on gas infrastructure, electrical construction, and industrial maintenance should be positioning in ERCOT and PJM territories now, ahead of the 2027 demand surge.
- The EIA specifically ties rising West South Central industrial demand to increased electrification in the oil and natural gas sector. For oilfield subcontractors in Texas, that means more electrical and mechanical work tied to upstream operations, not just new power plants.
- A 22% increase in ERCOT natural gas generation over two years signals significant turbine, compressor, and pipeline work. Subcontractors with gas turbine maintenance, combined cycle plant services, or fuel supply infrastructure capabilities should expect increased bid activity.
- Solar generation in PJM is forecast to increase 32% between summer 2025 and summer 2027. Subcontractors who can work across both gas and solar infrastructure will be better positioned to capture work as the two generation types expand together in the same region.
