Natural Gas-Fired Power Generation is Growing

As the demand for power keeps rising with the rapid development of AI data centers, natural gas is increasingly being seen as the leading source of fuel for electric generation.

A recent report from Global Energy Monitor, an organization that develops and analyzes data on energy infrastructure and uses with the goal of building a sustainable energy future, found that the U.S. now has the most gas-fired power capacity being developed and accounts for nearly one-quarter of the global total. GEM defines “in development” as projects that are announced, or in the pre-construction or construction phases.

The report determined that more than one-third of the capacity being developed will power data centers on-site, bypassing the increasingly stressed electrical grid and guaranteeing firm available electricity. The U.S. nearly tripled its gas-fired capacity in 2025, with 252 gigawatts (GW) planned. Of that total, about 100 GW will be grid-connected power to meet increasing demand from industrial, commercial and residential users, while the rest will be on-site data center power.

Global gas projects in development rose 31% in 2025, and GEM projects that 2026 could set a record for new gas power generation projects. The buildout of gas-fired generation in the U.S. will largely occur in Texas, with 80.6 GW in development, nearly half of it for data centers. Pennsylvania saw 8.8 GW of gas-fired projects being developed in 2025, while West Virginia has 7.9 GW.

The World Energy Outlook 2025 from the International Energy Agency, forecasts that oil and natural gas demand will continue to grow until 2050 based on current policies and regulations in force.

In addition, the U.S. Energy Information Administration, in its most recent Short-Term Energy Outlook, forecast that U.S. natural gas production will increase by 2% in 2026 and reach a record high in 2027. Most of that growth will come from three regions, including the Appalachian region, which contains the Marcellus and Utica plays.

The report noted that while Appalachia has accounted for the largest share of U.S. domestic production, growth has slowed due to pipeline capacity constraints, allowing the Permian and Haynesville regions in the Southwest to take the lead in production growth.

The IEA noted in its report that “The Age of Electricity is here”, which means that demand for all forms of energy for power will increase. “Electricity is at the heart of modern economies and electricity demand grows much faster than overall energy use in all scenarios” the IEA report said, growing by about 40% by 2035. The increased demand comes from a number of sources, including appliances and air conditioners, advanced manufacturing, industrial, electric vehicles, data centers and electrified heating.