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Short-Term Energy Outlook

Release Date: September 9, 2014  |  Next Release Date: October 7, 2014  |  Full Report    |   Text Only   |   All Tables   |   All Figures


Preliminary data indicate that power generators added 4.35 gigawatts (GW) of new capacity during the first half of 2014. This rate of new capacity builds is 40% below the rate of capacity additions during the same period last year. Power plants fueled by natural gas accounted for more than half of the new capacity coming online so far this year, with the remainder primarily composed of renewable generating capacity. No coal-fired generating capacity was completed during the first half of 2014, compared with 1.51 GW in 2013. Two coal plants with a total capacity of 0.58 GW are scheduled to begin operations this year. Preliminary data indicate that at least 0.95 GW of coal-fired capacity has been retired so far this year. A much larger number of coal plants are expected to retire during 2015.

Electricity Consumption

After cold weather during the first quarter of this year and relatively close to normal summer temperatures, EIA projects growth of 1.9% in U.S. retail sales of electricity to the residential sector in 2014. As forecast temperatures return to normal in 2015, EIA expects residential electricity sales will decline by 0.7% next year. Relatively modest economic growth compared with last year has led to slower growth in the electricity sales to the commercial sector. U.S. commercial electricity sales are expected to average 0.9% higher in 2014 than sales last year and then grow by 0.4% in 2015. EIA expects U.S. industrial electricity sales to remain flat during 2014 and grow by 2.2% in 2015 after two years of declines.

Electricity Generation

EIA projects that average daily U.S. electricity generation in 2014 will grow by 100 gigawatthours per day (0.9%) from last year. Changes in relative fuel costs have altered the mix of plants used to generate electricity. Power sector natural gas prices this year are expected to be more than 20% higher than prices last year, while the prices of coal delivered to the power sector are expected to remain flat. Rising natural gas costs lead to a reduction in the fuel's share of total generation from 27.4% in 2013 to 26.7% this year. In contrast, coal's share of total generation rises from 39.1% in 2013 to 40.1% this year. In 2015, EIA expects the power sector's price of natural gas will fall by 12%. This lower price, combined with the scheduled retirements of coal capacity, should push up natural gas's fuel share next year to 27.6% and reduce coal's fuel share to 38.8%.

Electricity Retail Prices

Residential electricity prices have risen in most states so far this year, compared with the same period in 2013. EIA expects the U.S. residential price to average 12.5 cents per kilowatthour in 2014, which is 3.1% higher than the average last year. The increase in average prices will be highest in the New England states, at 7.8%. Average U.S. residential electricity prices grow at a slower rate of 1.7% in 2015.

U.S. Electricity Summary
  2012 2013 2014 2015
Retail Prices (cents per kilowatthour)
Residential Sector 11.88 12.12 12.49 12.70
Commercial Sector 10.09 10.29 10.67 10.76
Industrial Sector 6.67 6.82 7.05 7.02
Power Generation Fuel Costs (dollars per million Btu)
Coal 2.38 2.35 2.36 2.36
Natural Gas 3.42 4.32 5.25 4.62
Residual Fuel Oil 21.05 19.33 19.85 18.39
Distillate Fuel Oil 23.51 23.08 22.98 23.16
Generation (billion kWh per day)
Coal 4.137 4.345 4.502 4.374
Natural Gas 3.349 3.051 2.995 3.112
Nuclear 2.102 2.162 2.125 2.120
Conventional Hydroelectric 0.755 0.737 0.706 0.739
Renewable (non-hydroelectric) 0.597 0.694 0.759 0.811
Total Generation 11.059 11.118 11.223 11.276
Retail Sales (billion kWh per day)
Residential Sector 3.76 3.81 3.88 3.86
Commercial Sector 3.63 3.67 3.70 3.71
Industrial Sector 2.69 2.62 2.62 2.67
Total Retail Sales 10.09 10.11 10.22 10.26
Primary Assumptions (percent change from previous year)
Real DIsposable Personal Income 3.0 -0.2 2.5 2.8
Manufacturing Production Index 4.4 2.9 3.5 3.5
Cooling Degree Days 1.7 -12.7 1.6 2.8
Heating Degree Days -12.6 18.5 1.0 -6.4
Number of Households 1.1 1.2 1.2 1.3

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