U.S. Energy Information Administration - EIA - Independent Statistics and Analysis
Energy in Brief
How is the fuel mix for U.S. electricity generation changing?
Last Updated: February 19, 2016
In recent years, there have been changes in the mix of fuels used to generate electricity in the United States. Natural gas and renewable energy sources are accounting for an increasing share of U.S. electricity production, while coal-fired generation has generally declined. In its Annual Energy Outlook, the U.S. Energy Information Administration (EIA) projects the share of electricity generated from natural gas and nonhydro renewable energy sources, such as wind and solar, will grow through 2040, while the share of other fuels, such as coal and petroleum, will decline.
The mix of fuels used to generate electricity in the United States has changed
Since 1990, the mix of fuels that are used to generate electricity in the United States has changed. For example, in 1990, coal-fired power plants accounted for about 42% of U.S. electricity generation capacity, but produced more than half of the total electricity supply. By the end of 2014, coal's share of electricity generation capacity in the United States decreased to 28%, and accounted for 39% of electricity generation. Over the same period, the share of natural gas-fired electric generation capacity more than doubled from 19% in 1990 to 40% in 2014, as did the share of actual generation from natural gas, rising from 12% in 1990 to 28% in 2014.
Both nuclear and hydropower electric generation capacity grew slightly during the period. However, nuclear energy's share of the total amount of U.S. electricity generated held steady at about 20%.
Monthly U.S. electricity generation from nonhydro renewables now routinely exceeds the amount of electricity generated by hydropower. A decade ago, hydropower—the historically dominant source of renewable generation—accounted for three times as much generation in the United States as nonhydro renewable sources, which includes wind, solar, biomass, geothermal, landfill gas, and municipal solid waste.
Electricity generation from wind experienced significant gains in its share of electric generation capacity, growing from 0.2% in 1990 to about 6% in 2014, and wind's share of actual electricity generation increased from 0.1% to 4%. Electricity generated from solar energy also increased over this time period, rising from almost 0% to 1%. There were substantial additions of utility-scale solar electric generation capacity in 2014, including 375 megawatts (MW) of solar thermal capacity and 3,250 MW of solar photovoltaic (PV) capacity, which is up more than 50% from the total solar capacity at the end of 2013.
Source: U.S. Energy Information Administration, Annual Energy Review 2011, Table 8.11.A (September 2012), and Electric Power Annual 2014, Tables 4.2.A and 4.2.B (February 2016)
What are the factors that have led to changes in the mix of fuels used to generate electricity?
The major factors that have contributed to changes in the U.S. electricity generation mix in recent years are:
- Declining natural gas prices
- Slowing growth in electricity demand
- Implementing federal air pollution emission regulations
- Meeting state requirements to use more renewable sources
- Using federal and state financial incentives for renewable resources
The declining price of natural gas was a major contributor to the rise in natural gas-fired electricity generation and the decline in coal-fired generation since 2008.
When natural gas prices are relatively low, high-efficiency, natural gas-fired combined-cycle (NGCC) power plants can supply electricity at a lower cost than coal-fired generators. Coal-fired power plants are then operated less often and earn less revenue, which decreases their profitability and decreases the investment in new coal-fired generation capacity.
Natural gas-fired generation capacity can be added in smaller increments to meet forecast changes in electricity demand, compared to less-flexible, coal-fired generators and nuclear power reactors. Natural gas-fired generators can also respond more quickly to changes in hourly electricity demand. Utilities also have lower compliance costs with environmental regulations when using natural gas, because natural gas produces fewer emissions than burning coal.
The outlook for U.S. electricity generation and capacity
Most of the existing coal-fired generation capacity in the United States is more than 30 years old. Coal-fired power plants must comply with U.S. Environmental Protection Agency (EPA) regulations to reduce mercury emissions and to reduce greenhouse gas emissions. As a result, utilities are planning to add a limited amount of new coal-fired generation capacity over the next decade, and instead have retired or plan to retire more than 30 gigawatts (GW) of existing coal-fired generation capacity through 2020.1 One GW is equal to 1,000 MW of electricity, which is enough to power between 750,000 and 1 million homes, depending on their size, location, and the time of day electricity is needed.
EIA's Annual Energy Outlook 2015 Reference case projects that about 1 GW of new coal-fired generation capacity will be added through 2020. Although a significant number of coal-fired power plants are retired early in the projection period, the reduction in coal-fired generation is not proportional to the decline in capacity, because many of the remaining coal-fired power plants may be operated at higher utilization rates. Despite those retirements, EIA projects coal will continue to account for the largest single share of the electricity generation energy mix in the United States through 2040.
EIA projects that about 50 GW of coal-fired capacity will be retired by 2020, with only about 2 GW of new capacity added. Although a significant number of coal-fired power plants are retired early in the projection period, the reduction in coal-fired generation is not proportional to the decline in capacity, because many of the remaining coal-fired plants may be operated at higher utilization rates. Despite those retirements, EIA projects coal will continue to account for the largest share of the electricity generation fuel mix in the United States through 2034, and then be overtaken by natural gas through 2040.
Source: U.S. Energy Information Administration (EIA), Annual Energy Outlook 2015, Reference case (April 2015)
Electric power producers have reported planned natural gas-fired capacity additions of about 56 GW and the retirement of about 7 GW of existing capacity through 2020.1 EIA projects that natural gas will account for 31% of total electricity generation in 2040. Much of the new natural gas-fired capacity uses combined cycle technology, which is relatively economical for supplying peak and baseload electricity demand.
Despite the scheduled closure of more than 2 GW of nuclear generating capacity by 2019, almost 6 GW of nuclear generating capacity is scheduled to be added between 2016 and 2020. In 2013, four nuclear power reactors were taken out of service, and in 2014 the Vermont Yankee nuclear power plant was also retired. The total capacity of the retired reactors was about 4.2 GW. Five new reactors with a combined capacity of about 5.5 GW are under construction or are planned for construction by 2020.1 EIA projects that nuclear power will supply 16% of U.S. electricity generation in 2040.
About 1 GW of new hydropower generation capacity, 24 GW of new wind generation capacity, and 15 GW of new utility-scale solar generation capacity are planned through 2020.
EIA projects that wind generation capacity will total about 110 GW in 2040, a 67% increase from 2014. EIA projects that solar generation capacity will increase by about 250% from 17 GW in 2014 to 61 GW in 2040, with nearly 70% being solar photovoltaic systems installed by homeowners and other end users of electricity. EIA also projects a 240% increase in geothermal capacity from about 3 GW in 2014 to 9 GW in 2040. Biomass electricity generation capacity is projected to increase by about 22% from 13 GW to 15 GW. EIA projects that hydro and wind energy will account for the largest shares of electricity generated from renewable energy sources through 2040.
- 1U.S. Energy Information Administration, Electric Power Monthly, Tables 6.5 and 6.6. February 2015.
Did you know?
Small-scale distributed solar photovoltaic (PV) systems, such as those found on residential and commercial rooftops, have grown significantly in the United States over the past several years. Starting in late 2015, EIA began including monthly estimates of small-scale distributed solar PV capacity and generation by state and sector in its Electric Power Monthly report. Almost 40% of the distributed PV capacity in the United States is located in California, with the next nine states accounting for another 44%. The remaining 40 states and the District of Columbia combined to have the remaining 16% of capacity.
Distributed solar PV installed capacity, top 10 states, as of September 2015
Source: Source: U.S. Energy Information Administration, Electric Power Monthly, Table 6.2B
Did you know?
In 2014, more than 10% of the electricity used in the grid covering most of Texas came from wind generation, according to the grid's operator, the Electric Reliability Council of Texas (ERCOT). Wind's share of the ERCOT generation mix grew from 6.2% in 2009 to 10.6% in 2014 as total electricity generation increased over the same period by 11.3%. The growth in wind generation is a result of new wind plants coming online and grid expansions that have allowed more wind power to flow through the electric grid to consumers.
Texas (ERCOT) annual electricity generation mix (2009–2014)
Source: U.S. Energy Information Administration, based on the Electric Reliability Council of Texas (ERCOT)