Federal energy officials say electricity use in the United States will rebound a bit this year after falling by nearly 4% in 2020 amid reduced business activity during the COVID-19 pandemic.
Overall, electricity consumption is expected to rise by 2.1% this year, the Energy Information Administration said in its March 9
Short-Term Energy Outlook. The largest growth will be in the retail residential sector, where EIA expects sales to grow by 2.7%.
Colder temperatures in the first quarter of 2021 resulted in higher electricity use compared to the same period in 2020. Despite rolling power outages in Texas and elsewhere last month, EIA estimates residential consumption to be 10% higher than at the same time in 2020.
EIA is also forecasting a 0.7% increase in retail sales of electricity in the commercial sector and a 3.7% increase in the industrial sector.
Turning to generation, EIA predicts the share for renewable energy sources will increase from 20% in 2020 to 21% this year and 23% next year. Total wind capacity in the United States now stands at 118 gigawatts after two record-setting years of additional wind power coming online, according to another recent EIA report,
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In 2019 and 2020, project developers “installed more wind power capacity than any other generating technology,” the March 3 report said. Last year, 14.2 GW of wind capacity came online, surpassing the previous record of 13.2 GW in 2012.
EIA expects natural gas to make up a smaller share of electricity generation in 2021 because of higher prices for deliveries of the fuel to power plants. Natural gas will average 36% in 2021 and 35% in 2022, compared to 39% in 2020.
Last month, the Henry Hub natural gas spot price surged to an average of $5.35 per million British thermal units (MMBtu), compared to the January average of $2.71/MMBtu. That was the highest nominal monthly average Henry Hub spot price in seven years.
“Higher prices in February reflect increased demand for natural gas because of much colder-than-normal temperatures throughout most of the country,” the report said.
Meanwhile, EIA expects coal use for power generation to increase by 16% to 505 million short tons in 2021. Coal’s forecast share of generation will average 23% in 2021 and 2022, up from 20% in 2020.
“Supply for rising coal-fired generation will be partly met by draws from on-site stockpiles at power plants,” the report said.