Electricity Consumption and Generation Expected to Remain Relatively Stable

According to the latest “Short-Term Energy Outlook” report published by the U.S. Energy Information Administration (EIA), there are changes ahead, albeit mostly minor, for electricity consumption and electricity generation.

Electricity Consumption

In terms of consumption, the EIA report forecasts that total consumption of electricity in the U.S. will remain fairly stable, falling by one percent in 2023 and then growing by just over one percent in 2024. “We estimate that electricity consumption grew by 3% in 2022,” said the report.

Most of EIA’s expected change in U.S. electricity demand will occur in the residential sector, where the report expects retail sales to fall as a result of a milder summer in 2023 compared with 2022, with about 10 percent fewer cooling degree days. The EIA expects residential electricity sales to grow in 2024, because it expects five percent more heating degree days in 1Q24 compared with 1Q23. The forecast also reflects trends in the housing stock. “Our forecast assumes the U.S. housing starts resume growing in 2024 after a sharp decline in growth in 2023,” said the report.

Electricity Generation

EIA predicts that U.S. generation in its forecast will largely follows consumption, declining in 2023, then rising in 2024.

Renewables: “Generation from renewable sources is the main contributor of growth in U.S. electricity generation,” said the report. The forecast share of U.S. renewables generation is expected to rise from 21 percent in 2022 to 24 percent in 2023, and then to 26 percent in 2024. About two-thirds of this forecast increase in renewables generation comes from new utility-scale solar photovoltaic capacity, and most of the rest is from new wind projects.

The EIA report added that power generators plan to add 32 gigawatts (GW) of utility-scale solar photovoltaic (PV) in 2023 and another estimated 32 GW in 2024. It forecasts that small-scale solar capacity will grow by 9 GW in 2023 and by 12 GW in 2024. Wind capacity is expected to increase by 6 GW in both 2023 and 2024.

Natural Gas: “We expect the share of electricity generation supplied by natural gas to decrease from 39% in 2022 to 38% in 2023 and 37% 2024, while the share of electricity generated by coal will fall from 20% in 2022 to 18% in 202,3 and 17% in 2024,” said the report.

Coal: After increasing in both 2021 and 2022, the EIA now expects U.S. coal production to decline by 11 percent, to about 530 million short tons (MMst) in 2023, and a further six percent, to 500 MMst in 2024. “The primary reason for the decrease is our forecast of an 11% reduction in coal consumption in the electric power sector in 2023 followed by a 3% reduction in 2024,” said the report. That decline largely reflects almost 10 GW of coal-fired capacity retirements in 2023 and another 4 GW in 2024. At the same time, renewable generation is expected to increase by 20 percent between 2022 and 2024, reducing coal-fired generation.

Nuclear: The share of nuclear power generation is expected to remain close to 19 percent over the next two years.

The ”Numbers” – Past, Present, and Future

Electricity, Coal and Renewables

Electricity, Coal and Renewables  
  2021  2022  2023  2024 
U.S. electricity generation
(billion kilowatthours)  
4,108.30   4,244.66           4,177.32             4,229.76 
Residential electricity price
(cents per Kilowatthour)  
     13.66        15.07              15.45                  15.48 
U.S. coal production
(million short tons)  
      578.1        594.2              530.7                  500.8 
U.S. coal consumption
(million short tons)  
     545.6        514.4              458.5                  444.4 
U.S. solar capacity
   61,009       75,471          107,143               138,714 
U.S. wind capacity
 132,629     142,929          148,855               155,209 



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