EIA expects solar will supply almost all growth in U.S. electricity generation through 2025

The EIA forecasts new capacity will boost the solar share of total generation to 5.6 per cent in 2024 and 7.0 per cent in 2025, up from 4.0 per cent in 2023.

The shift to cleaner energy will result in a drop in coal consumption because demand declines in the electric power sector, which will also mean a decline in coal production. Black and Veatch photo.

This article was published by the US Energy Information Administration on Jan. 9, 2024.

By Tim Hess, Kristen Tsai 

We expect solar electric generation will be the leading source of growth in the U.S. electric power sector. In our January Short-Term Energy Outlook (STEO), which contains new forecast data through December 2025, we forecast new capacity will boost the solar share of total generation to 5.6 per cent in 2024 and 7.0 per cent in 2025, up from 4.0 per cent in 2023.

annual change in U.S. electric power sector capacity and generation by source

Data source: U.S. Energy Information Administration, Short-Term Energy Outlook, January 2024
Note: Values for 2023 reflect historical data through October and estimates for November and December.

The STEO includes two Between the Lines articles that discuss how our forecast for Brent crude oil prices performed in 2023 and a closer look at our Brent price forecast for 2024 and 2025. We expect U.S. crude oil and natural gas production growth to slow, but both continue to reach new records.

Other key takeaways from our January 2024 STEO include the following.

We believe that slower growth will still establish new annual records in U.S. crude oil and natural gas production

U.S. crude oil production

Data source: U.S. Energy Information Administration, Short-Term Energy Outlook, January 2024

U.S. dry natural gas production

Data source: U.S. Energy Information Administration, Short-Term Energy Outlook, January 2024

OPEC+ production will probably stay below targets
We forecast OPEC+’s crude oil production will average 36.4 million barrels per day (b/d) in 2024 and 37.2 million b/d in 2025, both less than its pre-pandemic five-year (2015–19) average of 40.2 million b/d. These values do not include Angola, which left OPEC in January 2024.

OPEC+ crude oil production and targets

Data source: U.S. Energy Information Administration, Short-Term Energy Outlook, January 2024

U.S. gasoline and diesel prices are likely to fall slightly
We expect gasoline and diesel prices to fall slightly in 2024 and 2025 primarily because of reduced refinery margins as indicated by lower crack spreads.

annual average retail gasoline and diesel price components

Data source: U.S. Energy Information Administration, Short-Term Energy Outlook, January 2024

We expect U.S. coal production and consumption to fall to volumes not seen since the early 1960s
Coal consumption falls because demand declines in the electric power sector, and coal production then declines in response.

U.S. monthly coal consumption and production

Data source: U.S. Energy Information Administration, Short-Term Energy Outlook, January 2024

 

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