Electric capacity in U.S. shifting from fossil fuels to renewables, EIA report says

The U.S. power grid will need to nearly double in capacity by 2050 to meet power demands, and most of that will come from renewable energy technologies, according to a report from the U.S Energy Information Administration (EIA).

In its Annual Energy Outlook 2023, EIA said declining capital costs for renewable energy technologies like solar panels, wind turbines and battery storage, combined with government subsidies, will increase renewable energy affordability and cost-effectiveness. Economic growth and rising electrification efforts will mean stable growth in U.S. electric power demand through 2050, the report said.

The report looked at various scenarios to explore long-term energy trends, including a Low Zero-Carbon Technology Cost Case, which assumes faster technology-cost declines; a High Zero-Carbon Technology Cost Case, assuming no technology cost declines; a Low Economic Growth Case, assuming U.S. GDP grows by 1.4 percent; a High Economic Growth Case, assuming U.S. GDP grows by 2.3 percent; and various combinations of the four.

EIA said the economic growth and zero-carbon technology cost combination cases show the most extreme outcome for growth of renewable and fossil fuel generating capacity out of all the cases. High economic growth and low zero-carbon technology cost has the highest project growth in renewable capacity, the report said, increasing nearly 600 percent between 2022 and 2050. Even without changes in economic growth or zero-carbon technology costs, EIA projected an increase in renewable capacity of about 380 percent by 2050, and an increase of about 11 percent for fossil fuel generating capacity. Even in low economic growth and high zero-carbon technology cost scenarios, the projected growth in renewable capacity approaches 230 percent.

In high economic growth and high zero-carbon technology cost combination cases, fossil fuel capacity increases by 36 percent between now and 2050; while in low economic growth and low zero-carbon technology cost combination cases, fossil fuel capacity decreases by 14 percent due to retirement of fossil fuel generators exceeding the amount built, the agency said.