A milder summer will lead to less demand for air conditioning compared to 2022, resulting in slightly less overall electricity demand, according to a monthly forecast from the Energy Information Administration.

Amid that downward trend in demand in the coming months, more electricity generation will be available from renewable sources and natural gas, EIA said. Wind and solar will see significant growth, and California's wet winter should lead to more generation from hydropower, according to the report.

As a result, coal will make up a smaller share of generation—17% in 2023 and 16% in 2024, compared to 20% in 2022.

“The increasing share of renewables in the U.S. generation mix is a major feature of our electricity forecast this summer and through 2024," said EIA Administrator Joe DeCarolis. “As electricity providers generate more electricity from renewable sources, we see electricity generated from coal decline over the next year and a half. We expect that the United States will generate less electricity from coal this year than in any year this century."

By 2024, the forecast share of electricity generation from renewable sources will rise to 26%, compared to 23% this year and 22% in 2022. The share of natural gas in generation, which averaged 39% last year, will climb to 40% in 2023 before decreasing to 38% next year “as a result of the growing availability of renewable energy generating capacity and an increase of natural gas prices," the report said.  

Natural gas consumption will hit near-record levels this summer, second only to last summer, according to the report. “Compared with last month's forecast, we have increased natural gas consumption for electricity generation by about 2% for 2023 and 3% for 2024," the report said. In addition, the benchmark Henry Hub natural gas spot price will average $2.35 per million British thermal units (MMBtu) this month and later rise to around $3.00/MMBtu in July and August, when power demand peaks.

There's some good news in the report for summer motorists. Forecasts for lower crude oil prices this month mean that EIA is calling for lower gasoline prices than previously expected across all regions of the country. At an average of $3.40 per gallon, this summer's forecast is about 20% lower than last summer.