Solar set to meet electricity generation demand in United States: EIA

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Electricity generation in the United States will grow by about 3 percent in 2024 and 1 percent in 2025. Renewable energy sources — mainly solar — will supply most of that growth, the U.S. Energy Information Administration (EIA) said.

EIA expects electricity from solar, wind, and hydropower combined to account for 22 percent of total U.S. generation in 2024, increasing to 24 percent in 2025. Electricity from those three sources had made up 21 percent of U.S. generation in 2023.

EIA forecasts solar will provide 41 percent more electricity in 2024 than in 2023. Generation from wind grows 5 percent in 2024 in EIA’s May forecast, but if wind speeds differ significantly from expectations, wind generation could change.

EIA expects 6 percent more hydropower generation in 2023 than in 2024, with the most significant growth in the Southeast. “In 2025, we expect generation from solar to exceed the contribution from hydroelectricity for the first year in history,” said EIA Administrator Joe DeCarolis.

EIA forecasts that retail gasoline prices will average near $3.70 per gallon in the United States from April through September, similar to prices during the same period last year.

EIA increased its forecasts for U.S. coal production and exports, as the immediate impact of the closure of the Port of Baltimore has become clearer. EIA now forecasts that U.S. coal exports will total 99 million short tons in 2024—a 4 percent increase from its April forecast but still less than expected before the collapse of the Francis Scott Key Bridge.

Although EIA also increased its forecast for coal production in 2024 from last month, it still forecasts 14 percent less coal will be produced in the United States than in 2023.

EIA expects that the startup of the Trans Mountain Pipeline last week will alleviate distribution bottlenecks and support the increase of Canada’s production of liquid fuels to about 6.3 million barrels per day in 2025, an increase of 500,000 barrels per day from current production.

EIA expects voluntary OPEC+ crude oil production cuts and ongoing geopolitical risks will keep the Brent crude oil spot price near $90 per barrel (b) for the remainder of 2024 before falling to an average of $85/b in 2025 as global oil production growth picks up.

Across the United States, EIA forecasts that retail gasoline prices will average near $3.70 per gallon from April through September, which is similar to prices during the same period last year. Refinery operations are a source of uncertainty for gasoline markets this summer.

EIA expects U.S. dry natural gas production to fall by 2 percent from the first quarter of 2024 (1Q24) to 2Q24 as a result of low natural gas prices. 1 percent less natural gas will be produced in the United States in 2024 than last year before production increases by 2 percent in 2025 to a record of almost 105 billion cubic feet per day (Bcf/d).

U.S. natural gas consumption in our forecast is mostly unchanged in 2024 compared with last year, averaging 89 Bcf/d. Less consumption in the industrial sector will offset increases in natural gas consumption in the electric power, residential, and commercial sectors.

U.S. electricity generation will grow by 3 percent (114 billion kilowatthours) in 2024, and generation from utility-scale solar will contribute almost 60 percent of that increase. Among other renewable sources, wind contributes 19 percent of 2024 U.S. electricity generation growth, and hydropower contributes 13 percent.

EIA revised estimate of U.S. coal exports in 2024 upwards by 4 percent compared with the April Short-Term Energy Outlook (STEO) due to more-than-expected metallurgical coal exports from the Appalachia region in February.

U.S. coal exports in 2024 will be almost unchanged from 2023. However, coal production will decline by 14 percent in 2024 to about 500 million short tons and then fall by about 1 percent next year.

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