Between now and 2050, the nation's electric generation fuel mix will take "a notable shift" with natural gas and renewable resources overtaking coal and nuclear energy as the dominant fuel sources, federal energy officials say.
Energy Information Administration's Annual Energy Outlook 2019 (AEO) projects generation from coal and nuclear will be less cost-competitive and decline over time as natural gas prices remain historically low and capital costs for renewable electricity continue to fall.
The United States will become a net energy exporter in 2020 and remain so through 2050 with high production of crude oil, natural gas and natural gas plant liquids, according to the report.
U.S. production of large volumes of natural gas going forward will sustain the fuel's low prices and lead to "increased use of this fuel across end-use sectors," EIA modelers said.
Electric cooperatives are already adjusting their generation resources to reflect these market forces, said Michael Leitman, NRECA senior analyst for economics and business.
"In recent years, electric cooperatives have experienced the impacts of low natural gas prices and increased renewable penetration on their electricity portfolios, both in their own generation and in the power they purchase," said Leitman.
"The latest AEO projects that these two major market fundamentals are set to continue, and will make natural gas and renewables the most likely options for electric cooperatives seeking to meet their resource needs in coming years."
The report forecasts the natural gas share of total U.S. generation to increase from 34 percent in 2018 to 39 percent by 2050, while renewables' share will jump from 18 percent to 31 percent.
Coal's 28 percent generation share today will plummet to 17 percent by 2050, and the nuclear share will drop from 19 percent to 12 percent during this period, the report said.
Other key takeaways from the report:
Growth in solar generation will continue even after the investment tax credit largely phases out in 2022 because the capital costs for solar continue to fall relative to other sources.
Increasing energy efficiency across end-use sectors will hold U.S. energy consumption "relatively flat, even as the U.S. economy continues to expand."
With more generation from natural gas and renewables, the electric power sector's carbon intensity will drop.