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Federal energy officials expect higher electricity use across all sectors in 2021 and 2022 after dramatic decreases last year, but demand will depend on the success of vaccination programs in curbing the pandemic.
Still, energy consumption levels in 2022 are likely to remain below 2019 levels, according to the Energy Information Administration in its
latest Short-Term Energy Outlook.
“Reduced economic activity and changes to consumer behavior in response to the COVID-19 pandemic caused energy demand and supply to decline in 2020,” said the Jan. 12 report. “The ongoing pandemic and the success of vaccination programs will continue to affect energy use in the future.”
EIA forecasts electric consumption across all sectors to rise by 1.5% this year and 1.7% next year, after falling by 4% in 2020. After near-historic decreases last year, electricity use in the commercial and industrial sectors is expected to rise this year by 0.9% and 1.2%, respectively.
EIA also expects a 2.4% increase in electricity use in the nation’s homes in 2021 and a 1.6% increase in 2022 as more residents crank up thermostats because of colder winter weather. Last year, as social distancing guidelines resulted in people spending more time at home, sales grew by 1.3% despite a mild winter.
“During the spring of 2020, retail sales of electricity to the residential sector were about 9% higher than the typical heating and cooling demand given the temperatures at that time,” the report said. “This effect appears to have moderated somewhat in recent months, averaging about 4% above typical consumption since July.”
Over the next two years, renewable energy as a source of electricity will continue its ascent, with a particularly bright outlook for solar, EIA said. Solar capacity is expected to exceed wind growth for the first time in 2021. About 15 gigawatts of large-scale solar (photovoltaic) capacity will come online this year, and another 12 GW in 2022, the report said. Small-scale solar capacity, driven mostly by residential installations, is forecast to increase by 4 GW in 2021 and another 3 GW in 2022.
“EIA’s forecast solar capacity growth reflects various state and federal policies to support renewable energy,” the report said.
Higher wholesale natural gas prices from decreased gas production will result in more coal production in 2021. EIA is projecting a 12% increase in coal production to 603 million short tons in 2021 because a 41% increase in natural gas prices will make the fossil fuel more competitive.
Still, the share of electricity generation from renewable resources will increase from 20% in 2020 to 21% in 2021 and 23% in 2022.