Energy Information Administration predicts cost-driven changes to renewables, coal

Published on May 14, 2021 by Chris Galford

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Owing to rising natural gas costs, the U.S. Energy Information Administration (EIA) has predicted that summer will bring a 12 percent decline in natural gas-based electricity generation, offset by a 21 percent rise in renewable generation and an 18 percent increase in coal-based generation.

The annual Summer Electricity Industry Outlook report produced those figures from comparisons to last summer, when the introduction of the COVID-19 pandemic turned the industry, and the world, upside down. Since then, the economy has begun recovering, and electricity use has increased accordingly, with a 1.5 percent increase in total electricity sales predicted this summer over the previous year. This includes a 4.5 percent increase in industrial sales and a 2.6 percent increase in the commercial sector.

“We believe renewable sources will primarily make up for the decrease of natural gas usage in Texas,” EIA Acting Administrator Stephen Nalley said. “Our forecast is that 28% of Texas’s electricity demand will come from renewables this summer, up from 21% in 2020.”

Numerous factors will spur the electrical surge: predictions of milder summer weather and fewer travel restrictions primary among them. In all, residential electricity use per customer is expected to decrease 2.5 percent this summer, even as hotels, restaurants, and other businesses impacted by stay-at-home orders last year experience renewed usage.

As to the natural gas-coal-renewables shift, the EIA noted the trends should be most pronounced in Texas and the Midwest.