EIA Forecast - Electricity, coal, renewables, and emissions
EIA has expanded its forecasts for electricity supply in the United States and has introduced new forecasts for wholesale electricity prices. A STEO Supplement provides more information about the changes. Lower costs for natural gas drive EIA’s forecast that annual average wholesale electricity prices will be lower in 2019 than last year in all areas of the United States. The forecast year-over-year declines range from -0.2% in the Southwest Power Pool (SPP) to -28% in the Electric Reliability Council of Texas market.
EIA expects the share of US total utility scale electricity generation from natural gas-fired power plants will rise from 34% in 2018 to 37% in 2019 and then decline slightly in 2020. EIA forecasts that the share of US generation from coal will average 24% in 2019 and in 2020, down from 28% in 2018. The forecast nuclear share of US generation remains at about 20% in 2019 and in 2020. Hydropower averages a 7% share of total US generation in the forecast for 2019 and 2020, similar to 2018. Wind, solar, and other nonhydropower renewables together provided 10% of US total utility-scale generation in 2018. EIA expects they will provide 10% in 2019 and 12% in 2020.
EIA expects electric power sector demand for coal to fall by 2% in 2020, compared with an expected decline of 15% in 2019. However, planned coal plant retirements will continue to put downward pressure on overall electricity demand for the fuel. Almost 13 gigawatts of coal-fired electricity generation capacity has retired this year or is scheduled to retire by the end of 2020, accounting for 5% of the capacity existing at the end of 2018.
EIA forecasts that renewable fuels, including wind, solar, and hydropower, will collectively produce 18% of US electricity in 2019 and 19% in 2020. EIA expects that annual generation from wind will surpass hydropower generation for the first time in 2019 to become the leading source of renewable electricity generation and maintain that position in 2020.
EIA is improving its regional-level trend analysis by inserting a generator-level production cost model that simulates hourly generation at individual power plants. This improves our insight into generation, especially from fast-growing renewable sources like wind and solar.
This additional granularity and the assumption that wind will return to more normal levels in 2019, after a windy first half of 2018, results in an EIA forecast that electricity generation from wind power will average 295 billion kilowatthours in 2019 and 335 billion kWh in 2020, estimates that are 4% and 7% lower, respectively, than forecast in the July STEO. In addition, the application of hourly dispatch that better models solar incidence lowers the solar electric production forecast by 1.1% in 2019 and by 2.8% in 2020.
EIA forecasts that, after rising by 2.7% in 2018, US energy related carbon dioxide emissions will decline by 2.3% in 2019 and by 0.5% in 2020. In 2019, EIA forecasts that space cooling demand (as measured in cooling degree days) will be lower than in 2018, when it was 13% higher than the previous 10-year (2008–17) average. In addition, in 2019, EIA expects US. CO2 emissions to decline because the forecast share of electricity generated from natural gas and renewables is increasing while the forecast share generated from coal, which is a more carbon-intensive energy source, is decreasing. EIA’s projected emissions decline is lower in 2020 than in 2019 because it forecasts that both heating and cooling requirements will be slightly lower than normal. At the same time, the forecast coal share of generation will remain about the same as in 2019 while the natural gas share declines. Although EIA forecasts that generation from renewables will continue to increase in 2020, a forecast decrease in nuclear power offsets 24% of the renewables’ gain.
Source : Strategic Research Institute