The use of coal in electric generation has been dropping, but that decrease will be tempered by higher natural gas prices in 2021, according to federal energy experts.
In its latest
Short-Term Energy Outlook, the Energy Information Administration forecasts U.S. coal production to total 624 million short tons (MMst) in 2021, compared to 521 MMst in 2020. In 2019, coal production was 706.3 MMst.
“EIA expects coal production to grow because of increased coal demand from the electric power sector amid higher natural gas prices in 2021,” the report said.
In 2021, EIA expects higher monthly averages for Henry Hub natural gas spot prices: $3.01 per million British thermal units, compared to $2.07/MMBtu for 2020. Prices will increase in coming months, the Dec. 8 report said, because of “rising space heating demand and rising U.S. liquefied natural gas (LNG) exports amid declining U.S. natural gas production.”
EIA expects total U.S. electricity consumption to rise by 1.3% next year, “the result of forecast colder temperatures in the first quarter compared with the same period last year, in addition to continued higher consumption as many people will still be at home more because of the pandemic.”
Meanwhile, electricity consumption is expected to decrease by 3.9% in 2020, the report said. Retail sales to the commercial sector will fall by 5.9% and by 8.8% in the industrial sector. Residential sales will still rise in 2020, the report said. However, they will increase at a lower rate, 1.5%, than the forecast of 2.5% in last month’s STEO.
“Milder winter temperatures in early 2020 led to less residential consumption for space heating, but this effect was offset by increased summer cooling demand and increased electricity use by more people staying home in response to the pandemic,” the report said.
EIA’s projections of the growing role of renewables in generating the nation’s electricity are holding steady in this month’s report. The share of generation from renewable energy sources is expected to rise from 18% in 2019 to 20% in 2020 and 21% in 2021.
Twenty-three gigawatts of new wind capacity are expected to come online in 2020 and 9.5 GW in 2021, the report said, while utility-scale solar capacity is expected to rise by 12.8 GW in 2020 and by 14 GW in 2021.