Natural Gas-Powered Electricity Production Market Set to Top USD 79 Billion by 2034, Projected at a Compound Annual Growth Rate (CAGR) of 5.6%
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The natural gas-fired electricity generation market is experiencing significant growth, particularly in the distributed natural gas-fueled generation segment. This segment, valued at approximately USD 26.9 billion in 2024, is projected to increase to around USD 66.1 billion by 2034, with a compound annual growth rate (CAGR) of 9.4% during 2025-2034[1].
North America leads the market, holding around 34.9% market share in distributed natural gas-fueled generation in 2024, with a value of USD 9.3 billion[1].
Driving this growth are several factors:
- Rising electricity demand worldwide, particularly for reliable and flexible power supplies.
- Increasing focus on energy reliability and resilience, favouring distributed generation systems close to consumption points.
- Growing concerns about carbon emissions, as natural gas-fired generation emits less CO₂ compared to coal or oil, aligning with global decarbonization efforts.
- Demand from critical power users such as data centers, hospitals, and manufacturing units needing uninterrupted power.
- Urbanization and infrastructure development pushing adoption of decentralized energy systems, valued for flexibility and cost efficiency.
- Opportunities from integrating distributed natural gas generation with renewable sources and smart grid technologies to enhance reliability and optimize performance.
- Government incentives that promote clean, efficient energy generation and support for distributed power generation[1].
The broader natural gas usage perspective also shows strong growth, with industrial and commercial natural gas distribution markets forecasted to have a CAGR of 7-8% due to energy diversification strategies, network expansions, and environmental policies[4].
While the power generation gas turbine market, a related segment, is expected to grow at a lower CAGR of around 5.7% between 2025 and 2035, the stronger growth in distributed natural gas generation indicates a market preference for localized, flexible, and cleaner natural gas-based power solutions[2].
In terms of power output, the 100-500 MW segment leads the market, holding a 42.1% share[1]. Advances in turbine technology, integration with hydrogen blends, and adoption of alternative fuels like methanol are enhancing the sustainability of the market[1].
Sweet natural gas is the leading fuel source, contributing 56.2% to total electricity generation capacity[1]. Natural gas plants can provide grid support and serve as renewable backup.
Regions like Asia-Pacific, with strong energy demand, have supported market dominance, holding a USD 19.9 billion market value in 2024[1]. The market is projected to grow at a CAGR of 5.6% from 2025 to 2034[1].
In summary, the natural gas-fired electricity generation market is projected to expand robustly over the 2025-2034 period, driven by strong demand for reliable, lower-carbon, and flexible power generation solutions. Distributed natural gas generation will play a key role in this growth, with North America remaining a leading region by market share.
[1] [Source] [2] [Source] [3] [Source] [4] [Source]
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