The Rise Of Renewables
In its latest Short-Term Energy Outlook, the US Energy Information Administration (EIA) forecasts that US power plants will generate about 4,300 billion kilowatt hours of electricity in 2024, which would be 3% more than in 2023, in response to a hotter-than-normal start to summer and increasing power consumption by the residential and commercial sectors. Forecast electricity generation grows by an additional 1% in 2025.
The fastest-growing source of electricity in the United States is solar power. The EIA expects utility-scale solar in the electric power sector to account for 5% of US generation in 2024, up from 4% last year, and to increase to a share of 7% in 2025. Current plans indicate the electric power sector will increase solar generating capacity by 64 gigawatts (GW) (71%) between 2023 and 2025. Similarly, wind power capacity is set to increase 13 GW (9%) over the next two years, but its generation share remains relatively stable at 11% of total US generation.
The intermittent generation patterns of solar and wind are assisted by additions of battery storage capacity, which charge during low-cost periods of the day and generate power during high-cost periods. The EIA expects battery storage capacity will grow by 26 GW (169%) between 2023 and 2025.
Although natural gas continues to provide more US electricity generation than any other source, the EIA expects growing generation from renewables will displace more natural gas over time. The forecast natural gas generation share in 2024 averages 42%, similar to what it was in 2023, and falls to 40% in 2025. The agency expects coal’s generation share will fall to a record low of 16% in 2024 as a result of recent capacity retirements and lower utilization rates of the remaining coal fleet.
