U.S. generation projected to rise 3% this year, driven by solar and natural gas (original) (raw)

A portion of the Eleven Mile Solar Center under construction. (Courtesy: Ørsted)

U.S. electricity generation is expected to increase by 3% – 121 billion kilowatthours (BkWh) – this year compared to 2023, largely driven by solar power and natural gas, according to Short-Term Energy Outlook analysis from the U.S. Energy Information Administration (EIA).

“Significant” capacity expansions are driving the increase in solar generation, EIA said, with solar accounting for 59% of U.S. generating capacity additions in the first half of 2024. The increase in solar capacity was also supported by the development of new battery storage capacity, EIA said.

Perhaps not a surprise, Texas and California are expected to receive the largest gains in solar generation this year: 16 billion kilowatthours (BkWh) for the former, and 9 BkWh for the latter, per EIA.

The EIA credits part of the increase in generation to a hot start to the summer, which resulted in higher air conditioning demand. Next year, EIA predicts an additional 1% (60 BkWh) increase in generation, largely due to ongoing growth in electricity demand, primarily from the industrial sector.

Nationwide, EIA predicts a 37% increase in solar power (60 BkWh) this year, followed by a a 2% increase (35 BkWh) in natural gas, followed by smaller increases in wind (up 6%, or 27 BkWh) and nuclear (up 1%, or 11 BkWh).

Utility-scale solar generation is growing across all regions of the country, EIA said, and is expected to increase 34% nationwide this year through “rapid” installation of solar projects. Solar generating capacity grew in the first half of 2024 by 12 GW, which accounted for 59% of all capacity additions across all types of energy sources.

The increase in natural gas generation was driven by low fuel costs and higher overall electricity demand, EIA said. A few new combined-cycle plants have come online in the past year, but the new capacity has been offset by other plants’ retirements, EIA added. Forecast natural gas generation in 2024 is increasing the most in the Midwest (up 11 BkWh) and in the Mid-Atlantic (up 9 BkWh). EIA expects less natural gas generation in California this year (down 6 BkWh) and in the Southwest (down 2 BkWh), in response to large increases in solar generation.

Coal-fired generation is down in most regions as it’s displaced by natural gas, renewables, and plant closures, per EIA. Coal-to-natural gas switching is most evident in the Central/SPP region, where the EIA forecast 9 BkWh less coal generation this year than in 2023.

Regarding emissions, EIA expects energy-related carbon dioxide (CO2) emissions to remain flat between 2023 and 2025. EIA maintains that in 2024, the stability of total CO2 emissions is a result of rising natural gas consumption across sectors, offset by less generation from coal. Additionally, EIA expects emissions in 2025 to remain unchanged, as a less than 1% decrease in natural gas emissions, caused by a decrease in naturual-gas fired electricity generation, is offset by a 1% increase in petroleum emissions associated with increased diesel consumption.

EIA also expects the carbon intensity of energy (the total energy-related CO2 emissions per unity of energy consumed) to decline by 1% both this year and next. This reduction can be attributed to renewable energy sources supplying an increasing share of U.S. energy, EIA said. Primary energy consumption is expected to grow by about 1% in both years, with more than 50% of the growth met by solar, wind, and hydropower.