Natural gas is the most widely used fuel for electricity generation in the United States; it is used to generate approximately 25% of the electricity consumed in the country. In contrast to other solid fuels used to generate electricity, natural gas is relatively clean burning.

While historically the majority of electricity generation using natural gas has taken place in large, capital-intensive facilities, in recent years there has been a trend toward distributed generation. This refers to local generation on a smaller scale in residential, industrial and commercial areas of demand.

There are three forms of natural gas power plants that are used to generate electricity.

Simple cycle plants burn natural gas, which converts the gas into high-pressure gaseous by-products that are used to turn the turbine, thus generating electricity. Simple cycle plants can be started up at short notice, so they are used extensively to ramp up production during periods of peak demand. However, they are only about 35% efficient in converting heat to electricity. For this reason, simple cycle plants are mostly used to accommodate periods of peak demand.

Combined cycle plants work in the same way as simple cycle plants, but they also make use of a heat recovery steam generator to recover more of the heat generated. Combined cycle plants are 55-60% efficient.

Steam powered plants heat water using natural gas, and the steam drives a turbine that generates electricity. This is similar to the way in which coal power plants and nuclear power plants work. Steam powered plants are approximately 35-40% efficient.

For the purposes of comparison, coal power plants are typically about 40% efficient. There have been some advancements in coal power plant technology, but even the most advanced models do not exceed 50% efficiency. Nuclear power plants are only approximately 33% efficient. Given that the majority of electricity produced by natural gas in the U.S. is generated in combined cycle plants, on average it is much more efficient than these alternatives.