Tuesday, 16 June 2026

Natural gas's share of the global electricity mix fell for a fifth straight year, with cheaper renewables displacing it from generation stacks, Renew Economy reported.

The outlet attributes the slide to cost, not policy: solar and wind are simply undercutting gas-fired plants in dispatch.

That mechanic matters. Renewables run at near-zero marginal cost once built, so grid operators call on them first and push gas units further down the merit order. Capacity factors at combined-cycle plants shrink as a result.

The shift breaks the transition-fuel thesis that carried gas through the prior decade, when it gained share as coal retired across Europe and North America. Five consecutive annual declines indicate renewables are now eating into gas, not only coal.

The consequence reaches deepest in LNG. Long-dated offtake contracts and regasification terminals were sanctioned on power-sector demand curves that assumed gas would keep gaining share. A cost-driven loss is harder to unwind than a regulatory one, because cutting subsidies or relaxing emissions rules does not raise the marginal cost of a finished wind farm.

Gas peakers still have a role in covering evening ramps and balancing intermittent supply. Baseload economics are the segment under pressure.

Renew Economy's framing places the decline squarely on relative cost rather than mandates. For utilities running gas fleets commissioned during the transition-fuel years, that raises stranded-asset exposure on plants with two decades of book life left.