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Short-Term Energy Outlook

Release Date: June 7, 2016  |  Next Release Date: July 12, 2016  |  Full Report    |   Text Only   |   All Tables   |   All Figures

Electricity

Natural gas continues to be the leading fuel for power generation in recent months. For the first quarter of 2016, natural gas supplied 32.1% of total U.S. electricity at utility-scale power plants, and coal supplied 28.7%. These fuel shares compare with first-quarter 2015 shares of 28.6% and 36.0% for natural gas and coal, respectively. Generation by renewable energy sources (other than hydropower) have also grown. In the first quarter of 2016, renewables supplied 9.0% of total U.S. utility-scale generation, up from 6.9% in the same period in 2015.

Electricity Consumption

The National Oceanic and Atmospheric Administration projects U.S. cooling degree days from April 2016 through September 2016 to be 2.3% lower than the same period last year. Cooler temperatures should lead to lower use of electricity for air conditioning. EIA forecasts U.S. retail sales of electricity to the residential sector in summer 2016 will average 0.1% less than last summer. Forecast daily average U.S. residential electricity sales during 2016 are 1.6% below the 2015 level. EIA expects U.S. retail sales of electricity to the commercial and industrial sectors to grow by 0.5% and 0.2%, respectively, during 2016.

Electricity Generation

Total U.S. generation of electricity is forecast to average 11,140 gigawatthours per day (GWh/d) in 2016, which is 0.5% lower than total generation in 2015. Sustained low natural gas prices have led power generators to significantly expand the share of electricity produced by that fuel. EIA expects natural gas to supply 34.4% of total generation in 2016, up from 32.7% last year. This increase is displacing coal generation, whose share of generation is expected to fall from 33.2% last year to 29.9% in 2016. The forecast increase in natural gas prices in 2017 contributes to the forecast electricity generation share for natural gas falling slightly to 33.3% in 2017 and the coal share rising to 30.9%.

Electricity Retail Prices

EIA expects the U.S. retail price of electricity for the residential sector in June to average 13.0 cents per kilowatthour (kWh), with the highest price at 18.4 cents/kWh in New England, and the lowest price at 11.0 cents/kWh in the East South Central. The U.S. residential electricity price averaged 12.7 cents/kWh in 2015 and is expected to stay about the same in 2016 and then rise 2.5% to an annual average of 13.0 cents/kWh in 2017.

U.S. Electricity Summary
  2014 2015 2016 2017
Retail Prices (cents per kilowatthour)
Residential Sector 12.52 12.67 12.64 12.96
Commercial Sector 10.74 10.59 10.50 10.71
Industrial Sector 7.10 6.90 6.76 6.88
Power Generation Fuel Costs (dollars per million Btu)
Coal 2.36 2.23 2.18 2.20
Natural Gas 4.98 3.22 2.77 3.56
Residual Fuel Oil 19.19 10.36 8.15 9.61
Distillate Fuel Oil 22.32 14.43 11.19 13.76
Generation (billion kWh per day)
Coal 4.333 3.715 3.331 3.499
Natural Gas 3.087 3.658 3.828 3.767
Nuclear 2.184 2.184 2.174 2.179
Conventional Hydroelectric 0.705 0.682 0.751 0.739
Renewable (non-hydroelectric) 0.765 0.817 0.925 1.007
Total Generation 11.215 11.198 11.140 11.326
Retail Sales (billion kWh per day)
Residential Sector 3.86 3.84 3.77 3.85
Commercial Sector 3.70 3.72 3.74 3.80
Industrial Sector 2.73 2.63 2.63 2.67
Total Retail Sales 10.31 10.20 10.16 10.34
Primary Assumptions (percent change from previous year)
Real DIsposable Personal Income 2.7 3.4 2.8 3.3
Manufacturing Production Index 1.3 1.1 0.5 3.5
Cooling Degree Days -0.7 14.7 -3.7 -1.9
Heating Degree Days 1.9 -10.3 -2.1 4.2
Number of Households 1.0 1.0 1.1 1.1

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