EIA Annual Energy Outlook projects U.S. energy consumption, demand to return to normal by 2029
As it has changed the face of the world, so too has the COVID-19 pandemic changed the United States Economy and energy sector, but some of those effects could be reversed by the end of the decade, according to the U.S. Energy Information Administration (EIA).
Other changes may last decades, according to the EIA’s Annual Energy Outlook 2021.
“It will take a while for the energy sector to get to its new ‘normal,’” EIA Acting Administrator Stephen Nalley. “The pandemic triggered a historic energy demand shock that led to lower greenhouse gas emissions, decreases in energy production, and sometimes volatile commodity prices in 2020. The pace of economic recovery, advances in technology, changes in trade flows, and energy incentives will determine how the United States produces and consumes energy in the future.”
Consumption and demand were among the items at the forefront of consideration. For the most part, the EIA expects U.S. energy consumption to return to 2019 levels by 2029, dependent on the pace of economic recovery. If the economy continues to be hard-hit, consumption may take until 2050 to recover. Demand, however, should return to normal by 2025.
This new world presents an opportunity for renewable energy. As incentives increase and technology costs fall, the EIA now predicts they could account for nearly 60 percent of capacity additions through 2050, while the natural gas share should remain relatively flat at around 36 percent. Coal and nuclear shares could halve. If prices or supply for natural gas or oil go and stay high, the United States could continue to export more energy than it imports through 2050.
U.S. carbon dioxide emissions are predicted to decrease through 2035. After that, however, they are expected to begin increasing again in most scenarios.
All predictions must be taken with some salt, though — the EIA itself has said its projections face greater uncertainty due to the ongoing pandemic. These predictions were based on a reference case to explore assumptions about technology, policy, and the economy. This case allowed the EIA to examine a future complete with slower consumption growth thanks to increased energy efficiency and an ever-increasing energy supply. Further cases were investigated for varying economic growth, commodity prices, and supply, as well as technology costs.
