Natural Gas-Fired Electricity Generation Market Size, Share, and Industry Analysis By Type (Open Cycle and Combined Cycle), By Application (Power & Utility, Oil & Gas, and Others), and Regional Forecast 2026-2034

The global natural gas-fired electricity generation market size was valued at USD 49.92 billion in 2025. The market is projected to grow from USD 52.65 billion in 2026 to USD 80.6 billion by 2034, exhibiting a CAGR of 5.47% during the forecast period.

The global natural gas-fired electricity generation market is gaining huge popularity owing to its adoption in the power & utility sector. Natural gas is easily available and it is a cleaner option compared to coal-based power generation. Furthermore, natural gas, when used for power generation, emits less carbon than other fossil fuels. According to the International Energy Agency (IEA), natural gas accounts for a quarter of electricity generation globally. It can be stored and delivered efficiently via pipeline or liquified and sent by ship.

• According to World Energy Data, the electricity generation from natural gas in 2023 accounted for 6,622.93 TWh (trillion watt hours). In addition, the share of natural gas-fired electricity generation accounted for 22.47% of global electricity generation in 2023.
• World Energy Data stated that in 2023, the major countries with the highest per capita electricity generation via natural gas were the U.S., Japan, Canada, the U.K., Germany, France, and others. In the U.S., natural gas-fired electricity generation accounted for 5,300 kWh, followed by Japan, which generated 2,700 kWh, and Canada, which generated 2,351 kWh.

Natural Gas-Fired Electricity Generation Market Driver

Growing Demand for Natural Gas-Fired Electricity Generation across Industrial, Commercial, and Transportation Sectors is Driving the Market Growth

Natural gas-fired electricity generation is widely used in the industrial sector to power industrial facilities and as a feedstock for manufacturing different products. Further, in the commercial sector, natural gas-fired electricity is used in commercial buildings for heating the spaces with combined heat & power systems. In the transportation sector, natural gas is used in government and private vehicle fleets.

• According to the U.S. Energy Information Administration (EIA), in 2023, the industrial sector accounted for 32% of total natural gas consumption, followed by the commercial sector accounting for a 10% share, and the transportation sector, accounting for a 5% share in the U.S.
• Natural gas is widely produced and consumed in the U.S. According to EIA, in 2023, the residential sector accounted for 14% of total natural gas consumption. In addition, around 60% of the U.S. homes used natural gas for cooking, space & water heating, and drying clothes.

Top Five Natural Gas Consuming States in the U.S. Based on Energy Information Administration (EIA)

Natural Gas-Fired Electricity Generation Market Restraint

High Cost of Natural Gas-Fired Electricity Generation and Safety Concerns Hinder Growth

Natural gas faces price volatility across various countries. This is majorly owing to the fluctuations in supply and demand, weather conditions, and geopolitical conflicts. In addition, the construction of pipelines and other infrastructure required for natural gas-fired electricity generation is expensive and raises safety concerns as natural gas is flammable and toxic. In some cases, methane, a hazardous greenhouse gas, is released during the production and distribution of natural gas, which can lead to explosions.

• According to the International Energy Agency (IEA), in 2022, the high gas prices led to gas-to-coal switching in many regions.

Natural Gas-Fired Electricity Generation Market Opportunity

Advancements in Carbon Capture, Utilization, and Storage (CCUS) for Reducing Carbon Emissions from Natural Gas Power Plants Present Significant Growth Opportunities

Advancements in CCUS as the world is advancing toward net-zero carbon emissions are gaining significant popularity. CCUS is used for natural gas-fired electricity generation to reduce carbon emissions from large sources, namely industrial facilities and power plants. Thus, the CCUS technology can facilitate the production of low-carbon electricity, thereby securing natural gas resources.

• As stated by IEA, since January 2022, around 15 CCUS projects at natural gas-fired power plants were announced. Further, in total, 50 Mt CO₂ of capture capacity at gas-fired power plants is currently under pipeline in the U.S. and the U.K. Furthermore, it is estimated that by 2030, around 230 Mt CO2 must be captured to achieve the Net Zero scenario.

Segmentation

Key Insights

The report covers the following key insights:

• Recent Advancements in the Natural Gas-Fired Electricity Generation Market
• Key Industry Trends
• Regulatory Landscape for the Natural Gas-Fired Electricity Generation Market
• Key Industry Developments (Mergers, Acquisitions, and Partnerships)
• Impact of COVID-19 on the market

Analysis by Type

Based on type, the natural gas-fired electricity generation market is segmented into open cycle and combined cycle.

The combined cycle segment accounted for the major market share. The combined cycle natural gas-fired electricity generation plants are highly efficient as they use hot exhaust gases, which would otherwise be dispelled from the system. These exhaust gases are used to boil water into steam that can spin the turbine to generate more electricity.

• GE Gas Power, the leader in gas power technology, uses a combined-cycle power plant, which generates 50% more electricity from natural gas compared to a simple-cycle plant. In addition, the combined cycle technology is widely preferred for large and onshore power generation plants.
• As stated by Ipieca Ltd., the global oil & gas association, the open cycle technology has been implemented on three onshore installations in Norway for over 20 years.

Analysis by Application

Based on application, the market is segmented into power & utility, oil & gas, and others.

The power & utility segment accounted for the highest share of the market. Natural gas-fired electricity generation is widely adopted in the power and utility sector, especially in the U.S., Middle East, and Eurasia. A surge in electricity demand owing to power disruptions, AI-driven data center expansion, and a resurgence in manufacturing and industrial reshoring is driving the market growth.

• As stated by IEA, the natural gas-fired electricity generation in the U.S. grew by around 7% in 2022 compared to a 3% decline in the previous year. Furthermore, in Eurasia, gas-fired electricity generation grew by 3% compared to 8% in 2021, and in the Middle East, it increased by 1% compared to 4% in 2021.

Regional Analysis

Based on region, the market has been studied across North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa.

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North America accounted for a major share of the global natural gas-fired electricity generation market in 2023. The U.S. is the primary source of electricity generation primarily as it emits fewer pollutants and can be turned on & off easily. In North America, natural gas is majorly used in steam turbines and gas turbines for electricity generation. This growth is majorly attributed to growing domestic supply and relatively low natural gas prices in the U.S.

• According to EIA, the natural gas-fired electricity generating capacity based on type, namely combined-cycle gas turbine accounted for 58%, followed by simple-cycle gas turbine with 26%, steam turbine accounting for 15%, and internal combustion engine (ICE) accounting for 1% share.
• EIA has stated that in 2023, the operators in the U.S. added 9,274 megawatts (MW) of new natural gas turbine generating capacity to the power grid.

Europe accounted for a significant share of the natural gas-fired electricity generation market owing to a rise in the share of natural gas in energy supply, which accounted for 24.7% in 2022 as stated by the International Energy Agency (IEA). Furthremore, in Europe, natural gas is used as a primary fuel for generating electricity. As the demand for heating in the residential sector increases, the demand for natural gas-fired electricity generation is estimated to rise in the coming years.

• In June 2024, Germany won the European Union’s informal approval to pay billions of Euros to gas-powered plants in order to stabilize the grid when the renewable energy supplies are unsteady. The country is planning to phase out coal-fired power plants to reduce carbon emissions and offer support to natural gas-powered plants that meet the electricity demand.

Asia Pacific accounted for a significant share of the natural gas-fired electricity generation owing to growing electricity demand from the manufacturing sector. Major natural gas plants in this region are located in countries such as China, Japan, India, Singapore, Malaysia, and Vietnam. According to the gas exporting countries forum, by 2050, natural gas is estimated to account for 36% of the total energy mix in Southeast Asia.

• In October 2024, Mitsubishi Power completed the construction of a 5,300MW combined cycle power plant project in Thailand, thereby contributing to the country’s decarbonization and energy security measures. This project is a joint venture between Gulf Energy Development Public Company Limited and Mitsui & Co., Ltd.

Middle East is a popular region for natural gas-fired electricity generation owing to the presence of leading natural gas-producing countries, namely Iran, Qatar, Saudi Arabia, UAE, and others. For instance, Iran has the largest natural gas reserves in the Middle East, with a large network of natural gas pipelines. In addition, the UAE is one of the major natural gas producers.

• According to the IEA, the countries in the Middle East face significant climate and energy challenges, owing to which the domestic demand for oil & gas has increased substantially in recent years. Furthermore, around 95% of electricity generated in the Middle East comes from natural gas & oil.

Key Players Covered

The global natural gas-fired electricity generation market is fragmented, with the presence of a large number of group and standalone providers.

The report includes the profiles of the following key players:

• General Electric (U.S.)
• Siemens AG (Germany)
• Mitsubishi Hitachi Power Systems, Ltd. (Japan)
• Sulzer (Switzerland)
• Kawasaki Heavy Industries, Ltd. (Japan)
• Bharat Heavy Electricals Limited (India)
• Ansaldo Energia S.P.A. (Italy)
• Solar Turbines Incorporated (U.S.)
• Opra Turbines B.V. (Netherlands)
• Man Energy Solutions (Germany)
• Centrax Gas Turbines (U.K.)

Key Industry Developments

• In January 2025, 2-GW gas-fired plants with GE Vernova turbines entered commercial operation in China, powering up the country’s most populated province. This plant was established through a collaboration between GE Vernova and Shenzhen Energy.
• In August 2024, natural gas-fired electricity generation increased during heat waves in New England. Natural gas-fired electricity generation made up 56% of New England’s generation mix during the week of the June 16 heat wave, reaching 61% on June 22. Between July 6 and 13, natural gas-fired electricity averaged 58% of the generation mix.