Improved economic conditions as state and local governments ease coronavirus restrictions will result in higher electric consumption across all sectors this year, according to federal energy forecasters.
After a 3.8% drop in 2020, power consumption will rise 2.1% this year and increase another 1.3% in 2022, the Energy Information Administration said in its latest Short-Term Energy Outlook.
In addition, the STEO forecasts increases in retail electricity sales to the industrial sector and the commercial sector of 4.2% and 0.7%, respectively, in 2021. Residential retail sales are also expected to grow by 2.3% this year.
After reaching highs of $5.35 per million British thermal units (MMBtu) during February’s deep freeze and market disruptions, the benchmark Henry Hub natural gas spot price averaged $2.62/MMBtu in March.
EIA expects spot prices will average $2.73/MMBtu in the second quarter of 2021 and $3.04/MMBtu for all of 2021. That’s up from the 2020 average of $2.03/MMBtu.
The industry’s use of renewable sources of energy is expected to rise from 20% in 2020 to 21% in 2021 and 22% in 2022, due in large part to more wind and solar becoming operational. EIA expects an additional 16.1 gigawatts of new wind capacity in 2021 and 5.8 gigawatts in 2022. And new utility-scale solar capacity is expected to rise by 15.8 GW in 2021 and 14.9 GW in 2022. Another 5 GW in small-scale solar projects will be added in 2021 and 2022, according to EIA.
This month’s report includes the 2021 Summer Fuels Outlook, which forecasts gasoline prices and demand for the April-September driving season. Summer gasoline prices will reach a three year-high, the outlook said.
The 2021 Summer Fuels Outlook forecasts gasoline prices and demand for the April-September driving season. Summer gasoline prices will reach a three year-high, it said.
Prices at the pump will average $2.78 a gallon from April to September, compared to $2.07 a gallon last summer. Buoyed by vaccines and fewer pandemic restrictions, more drivers will likely hit the road this summer, the agency said.
“As COVID-19 impacts continue to subside with improved mitigation and vaccination efforts, vehicle miles traveled will increase, resulting in more gasoline demand,” the report said.
For all of 2021, EIA is expecting the average U.S. household to spend about $480 more on gasoline compared to last year—a 31% increase.