In 2022, about 4000 utility-scale electric generators were operating in the United States that burned petroleum, accounting for about 3% of total generation capacity. Those generators produced about 0.6% of the nation’s total electricity in 2022. Petroleum power plants are also known as oil-fired power plants.
The small contribution of petroleum is due to several factors. First, the efficiency of a new natural gas plant (45%) is much higher than a new petroleum plant (30%). Second, new natural gas, solar, and wind facilities are much cheaper to operate compared to petroleum. Third, electricity generation from petroleum plants releases more air pollution compared to natural gas, nuclear, and renewable sources. Fourth, energy policy has actively discouraged building petroleum power plants for large-scale electricity generation.
The 1978 National Energy Act discouraged the construction of new petroleum power plants and promoted coal, natural gas, nuclear, and renewable sources for electricity generation. A principal motivation behind the Act was to reduce the nation’s dependence on imported oil, which at the time was perceived by many to pose a significant national security.
The average size of operating petroleum power plants of all ages is about 8 MW of capacity; between 2020 and 2022, the average size of a new petroleum power plant was less than 2 MW. By way of comparison, the average size of operating nuclear power plants is 1081 MW.
The small size of petroleum power plants is due to their particular applications. They are often used for peaking power, meaning they can quickly ramp up and down to meet fluctuating electricity requirements. Petroleum power plants are frequently used as emergency backups for essential services such as hospitals and data centers. Stop the map’s animation in any recent year, and zoom in on the New York City metropolitan area. There you will see a large concentration of new petroleum generators in hospitals.
Petroleum generators can be quickly started when electricity from the grid is interrupted by blackouts, natural disasters, or equipment failures. Petroleum generators are also used to provide grid reliability that supports the integration of wind and solar into the energy mix.
