EIA: U.S. renewable generation expected to grow 4 percent between 2021 and 2023
According to the latest Short-Term Energy Outlook (STEO) from the U.S. Energy Information Administration (EIA), rising electricity generation from renewable energy resources such as solar and wind will reduce generation from fossil fuel-fired power plants over the next two years.
Renewable shares of generation are expected to reach 17 percent in 2023. This would represent a 4 percent increase over their (non-hydropower renewable sources, specifically) share last year. Coupled with that rise could be a natural gas decline to 34 percent, while coal could decline another percentage point to 22 percent overall.
EIA noted that solar capacity within the U.S. electric power sector by the end of 2021 was 20 times greater than a decade ago, while wind capacity more than doubled in that same period.
While a growing desire for renewable energy sources has definitely factored in, costs also have played a part. The EIA predicted that even faced with falling natural gas prices, the operating costs of renewable generators are now at the point that they can be expected to generally be lower cost than natural gas-fired units.
As a result, most of the growth in U.S. electricity generation over these two years is expected to come from new renewable energy sources, according to the EIA. At the end of 2021, there were already 63 GW of solar power generating capacity in operation, with another 21 GW expected to come this year, followed by another 25 GW in 2023. Alongside this, the existing 135 GW of wind capacity at the end of 2021 should be supplemented by 7 GW to be added this year, followed by 4 GW in 2023.
At the same time, coal actually saw an increased usage last year for its first time since 2014, to that new 23 percent average. This was due to a spike in costs that brought natural gas prices to an average of more than doubled in 2020. That led to falling natural gas shares in generation, to coal’s short-term benefit.
