From the United Kingdom to China, gas-fired electricity generation is declining even as overall power demand continues to grow. Behind this development lies a potentially profound transformation of global energy systems, one that could reshape gas producers’ strategies, infrastructure investment decisions and the economics of energy security.

For decades, natural gas has occupied a distinctive position in international energy strategies. Producing less carbon dioxide than coal when burned, offering operational flexibility and fitting relatively easily into centralized electricity systems, it gradually established itself as a transition fuel between conventional energy systems and increasingly decarbonized power generation.

That position rested on a fundamental assumption: continued growth in global electricity demand would sustain rising natural gas consumption.

Developments observed in 2026 are beginning to challenge that relationship.

According to an analysis published by Reuters on October 28, based on data from energy research organization Ember, six major electricity markets have recorded declines in gas-fired power generation: the United Kingdom, the Netherlands, Türkiye, Japan, South Korea and China.

The development is particularly significant because total electricity generation has continued to increase across these markets.

In other words, these power systems are producing more electricity while relying less heavily on natural gas.

This does not imply the imminent disappearance of gas-fired power plants or the end of global natural gas demand. It does, however, reveal changing conditions under which the fuel retains its competitiveness and strategic value.

A Common Trend Across Six Very Different Markets

The first defining characteristic of this development is its geographical diversity.

The six countries involved have substantially different energy systems, industrial structures and electricity policies.

In the Netherlands, where natural gas has historically played a major role in the energy system, its share of electricity generation fell below 32% during the first nine months of 2026.

In the United Kingdom, gas accounted for approximately 29% of electricity generation, reflecting a power system in which expanding wind capacity and the gradual transformation of the generation fleet are changing how thermal power plants operate.

Türkiye has experienced a particularly pronounced decline. Gas now accounts for less than 11% of electricity generation over the period examined, compared with an average of approximately 32% in 2021, when gas-fired generation reached a record level.

In East Asia, the shift affects two major importers of liquefied natural gas.

In Japan, gas accounted for 28.4% of electricity generation, compared with approximately 35% in 2022 and nearly 40% in 2019.

In South Korea, its share fell to slightly below 29%, reaching a historically low level.

China presents a different situation. Natural gas has never occupied a position comparable to that seen in Japan or parts of Europe. Nevertheless, its contribution to electricity generation has declined to a particularly low level of 3.07%.

These figures do not describe identical electricity systems.

They reveal a common development: natural gas is losing ground in markets where its historical role, economic competitiveness and future growth prospects differ considerably.

This convergence is one of the most significant features of the current period.

Electricity Growth No Longer Guarantees Rising Gas Consumption

The transformation underway challenges a relationship that was long considered relatively predictable.

In conventional electricity systems, increasing consumption generally required additional thermal generation to meet demand.

Industrial expansion, urbanization and electrification could therefore directly support greater consumption of coal, oil or natural gas.

The rapid deployment of renewable electricity technologies is progressively changing that relationship.

Solar and wind power can meet an increasing proportion of additional electricity demand without requiring a corresponding increase in fuel consumption.

Nuclear power plants, when available, also provide substantial electricity generation without relying on hydrocarbons.

Hydropower contributes to the same objective, although its output remains highly dependent on hydrological conditions.

Meanwhile, expanding electricity storage capacity allows some renewable generation to be shifted toward periods of higher demand.

These technologies do not perform identical functions. Their combined contribution can nevertheless reduce the number of hours during which gas-fired power plants need to operate.

The shift is already visible in global electricity statistics.

According to Ember, natural gas accounted for 23.9% of global electricity generation in 2020, compared with 21.8% in 2025.

This decline in market share does not mean that global gas-fired electricity generation has fallen continuously in absolute terms. In 2025, it actually increased slightly.

However, its growth has become substantially slower than that of several competing technologies.

Global solar electricity generation increased by 636 terawatt-hours in 2025, compared with an additional 38 terawatt-hours from natural gas.

The difference illustrates a fundamental transformation: an increasing proportion of global electricity expansion can now be achieved without a comparable rise in natural gas consumption.

An Energy Transition Following Different National Pathways

The decline in gas-fired generation should not automatically be interpreted as an equivalent reduction in carbon emissions.

The mechanisms driving this development vary considerably between countries.

In Europe, increasing renewable electricity generation and energy diversification policies are contributing to lower utilization of gas-fired power plants.

The energy crisis triggered by Russia's invasion of Ukraine also reinforced concerns about dependence on imported fuels.

In Asia, the underlying dynamics are more complex.

Japan has benefited from the gradual restart of certain nuclear reactors alongside continued solar power development.

South Korea also operates a substantial nuclear fleet, whose availability can significantly influence the need for thermal generation.

In China, rapid renewable energy expansion is taking place within an electricity system where coal remains dominant.

In some Asian markets, part of the decline in gas-fired generation may also be explained by increased coal-fired electricity production.

Such substitution has very different environmental consequences from replacing gas with solar, wind or nuclear power.

A reduction in gas-fired electricity generation may therefore reflect genuine decarbonization, a shift toward another fossil fuel, or a combination of several developments.

It would also be premature to interpret every change recorded in 2026 as permanently structural.

Relative fuel prices, weather conditions, power plant availability and supply constraints can generate substantial year-to-year variations.

The central question is how much of the observed decline reflects lasting changes in generation capacity and how much results from temporary economic decisions.

Gas Prices Are Becoming a Driver of Industrial Transformation

Geopolitical developments in 2026 have intensified pressure on international natural gas markets.

Disruptions affecting supplies from the Middle East have once again demonstrated the vulnerability of economies dependent on imported liquefied natural gas.

For electricity producers, fuel prices remain a decisive variable.

Gas-fired power plants incur operating costs directly linked to the amount of fuel consumed.

When natural gas prices rise sharply, their competitiveness can deteriorate relative to renewable generation, nuclear power or certain plants using alternative fuels.

Electricity producers consequently have an economic incentive to reduce gas consumption whenever other generation sources are available.

The implications extend beyond short-term operational decisions.

Repeated episodes of price volatility can influence long-term investment strategies.

A utility anticipating persistent supply risks or significant fuel price fluctuations may favor technologies less exposed to international commodity markets.

For importing countries, energy diversification becomes both an instrument of industrial competitiveness and a matter of national security.

Electricity generation is no longer simply a question of production costs.

It has become a central component of economic resilience in an increasingly fragmented geopolitical environment.

The Economic Model of Gas-Fired Power Plants Could Change

Declining gas-fired electricity generation does not necessarily mean that existing power plants are becoming obsolete.

Instead, their economic function may be changing.

In electricity systems dominated by thermal generation, gas-fired plants can operate for substantial periods and derive most of their revenue from the electricity they sell.

In systems incorporating greater shares of variable renewable energy, the situation becomes different.

A power plant may operate less frequently while remaining essential during specific periods.

When wind generation declines, sunlight is insufficient or electricity demand rises sharply, dispatchable generation capacity can play a critical role in maintaining grid stability.

Natural gas therefore retains a value that is no longer determined exclusively by the volume of electricity produced.

That value increasingly depends on plant availability, operational flexibility, rapid response capabilities and contributions to security of supply.

This creates an important economic challenge.

How should infrastructure be financed when it must remain continuously available but is required to generate electricity less frequently?

Electricity markets based primarily on payments for energy produced may struggle to provide adequate returns for certain facilities that remain essential to system reliability.

Capacity mechanisms, strategic reserves and balancing services may consequently become increasingly important.

The economic role of natural gas could gradually shift from regular electricity production toward flexibility and energy security.

This transformation is neither automatic nor universal.

Its trajectory will depend on the development of storage technologies, electricity networks, interconnections, demand-side management and alternative forms of dispatchable generation.

LNG Producers Face a New Source of Uncertainty

Developments in electricity markets carry particularly important implications for the liquefied natural gas industry.

For several years, major producers have invested heavily in liquefaction facilities, export terminals and international logistics networks designed to supply global markets.

These projects require substantial capital commitments and generally operate over investment horizons extending several decades.

Their profitability depends on demand growth, international prices, transportation costs and contractual arrangements.

Electricity generation represents an important source of natural gas demand in several regions.

If electricity consumption continues to increase without generating a comparable expansion in gas consumption, some long-term demand projections could become less reliable.

The risk does not necessarily involve the disappearance of demand.

Rather, it concerns a potential mismatch between additional volumes entering international markets and the actual requirements of consumers.

Rapid expansion of export capacity, combined with weaker-than-expected consumption growth, could place downward pressure on prices and producer revenues.

Such a scenario would be particularly relevant for projects whose financial viability depends on high utilization rates.

However, this does not establish that global LNG markets will inevitably experience excess capacity.

Industrial demand, residential consumption, coal-to-gas switching policies and regional energy developments may continue to support natural gas consumption.

It is also essential to distinguish total natural gas demand from its use specifically in electricity generation.

A decline in gas-fired power production does not necessarily translate into an equivalent contraction of the overall gas market.

Nevertheless, it can alter some of the assumptions underlying the industry's expansion strategies.

A Changing Geography of Energy Security

Current developments could also reshape relationships between energy-producing and energy-consuming countries.

Natural gas has long been a major instrument of international energy interdependence.

Pipelines, LNG terminals and long-term supply contracts establish durable economic relationships between states.

These infrastructures can strengthen security of supply, but they may also expose importing countries to geopolitical, commercial and financial vulnerabilities.

The expansion of domestic electricity generation capacity is gradually changing some of these relationships.

A country that increases solar, wind or nuclear electricity production can reduce part of its exposure to imported fuels.

However, this does not eliminate international dependencies.

Solar panels, batteries, turbines, grid equipment and certain nuclear technologies rely on international supply chains.

Energy dependence may therefore shift from fuel imports toward equipment manufacturing, critical minerals, technological capabilities and industrial infrastructure.

Energy security is no longer determined solely by access to hydrocarbons.

It increasingly depends on control over electricity infrastructure, technology availability and the ability to maintain reliable power systems under changing operating conditions.

This transformation could progressively redistribute strategic advantages between economies.

Countries with substantial renewable resources, resilient electricity networks and appropriate industrial capabilities may reduce some of their historical vulnerabilities.

Gas producers, meanwhile, will need to account for the possibility that export markets could evolve more rapidly than previously anticipated.

A Transformation That Remains Incomplete

The data available for 2026 do not establish that global natural gas consumption has reached its historical peak.

Nor do they demonstrate that all major electricity markets will follow the same trajectory.

The United States, the Middle East and several emerging economies have different generation structures and demand outlooks.

In some countries, natural gas retains substantial economic advantages, particularly where domestic resources are abundant and relatively inexpensive.

Elsewhere, it remains an alternative to coal or an important instrument for securing electricity supplies.

Growing electricity requirements from data centers, industrial electrification and broader economic development could also sustain demand for dispatchable generation.

The transformation currently underway should therefore not be understood as a uniform retreat of natural gas.

It instead suggests an increasing differentiation of its functions across energy systems.

Some markets may continue to expand consumption.

Others may permanently reduce gas-fired electricity generation while maintaining part of their installed capacity.

Still others may increasingly favor alternative technologies when economic conditions allow.

This diversity makes demand forecasting more complex and increases the strategic importance of national investment decisions.

Natural Gas Between Two Energy Models

The simultaneous decline in gas-fired electricity generation across six major markets represents an important signal.

Its significance extends beyond the statistical developments recorded during the first months of 2026.

It reveals a deeper transformation in the economics of electricity.

For decades, growing energy requirements directly supported greater consumption of the fuels needed to generate power.

Today, expanding renewable generation, nuclear capacity and electricity storage are progressively allowing these trajectories to diverge.

This transformation is changing the competitive position of power plants, the supply strategies of governments and the financial outlook for hydrocarbon producers.

It also requires a distinction between two concepts that have historically been closely associated: the amount of electricity an infrastructure asset produces and the strategic value of keeping that asset available.

A gas-fired power plant may generate less electricity while remaining essential to grid security.

Conversely, an electricity market may continue to expand without creating proportionate additional demand for gas exporters.

It is within this widening gap between electricity growth, fuel consumption and the value of generation capacity that part of the emerging global energy balance is taking shape.

The question is therefore no longer simply how much natural gas economies will need to consume, but what role they will still be willing to assign to it — and at what price.