The latest short-term energy outlook released by the U.S. Energy Information Administration forecasts renewable sources of generation will produce more electricity than coal-fired power plants in 2020 and 2021.

Electric Generation

Electricity generation from renewable energy sources rises from 17 percent in 2019 to 20 percent in 2020 and to 22 percent in 2021.

Coal’s forecast share of electricity generation falls from 24 percent in 2019 to 18 percent in 2020 and then increases to 21 percent in 2021.

U.S. electric power sector generation from natural gas-fired power plants will increase from 37 percent in 2019 to 41 percent this year. In 2021, the forecast natural gas share will decline to 36 percent in response to higher natural gas prices.

The forecast nuclear share of generation averages about 21 percent in 2020 and will be slightly less than 21 percent by 2021, which is consistent with upcoming reactor retirements.

Carbon Dioxide Emissions

EIA forecasts energy-related carbon dioxide (CO2) emissions, after decreasing by 2.8 percent in 2019, will decrease by 12.2 percent in 2020 and increase by 6.0 percent in 2021.

At the same time, they note this forecast is highly dependent on assumptions regarding the economic impact and subsequent recovery from COVID-19 mitigation efforts. In addition to economic growth, energy-related CO2 emissions are sensitive to changes in weather, energy prices, and fuel mix.

Coal Production

EIA forecasts total U.S. coal production will decrease by 29 percent to 501 million short tons (MMst) in 2020. This decline largely reflects less demand for coal from the electric power sector and the coal export market.

In 2021, EIA expects coal production to increase by 7 percent to 536 MMst because of forecast rising natural gas prices that make coal more competitive in the electric power sector.

Natural Gas Prices

The Henry Hub natural gas spot price averaged $1.63 per million British thermal units (MMBtu) in June, the lowest inflation-adjusted price going back to at least 1989, as a result of low demand.

EIA expects falling production will put upward pressure on natural gas prices through the end of 2021. EIA forecasts that Henry Hub spot prices will average $1.93/MMBtu in 2020 and $3.10/MMBtu in 2021.

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[Posted: July 9, 2020]

7/13/2020