Electricity, coal, and renewables

Electricity demand
Overall, we expect total electricity demand to increase by 1.2% in 2026 and reach 4,108 billion kilowatthours (BkWh). In 2027, we expect demand will increase by 3.3% and reach 4,244 BkWh.

Power demand peaks in the summer months (June through September) because of increased cooling needs. We expect total demand to increase by 2.3% in the summer months this year compared with 2025 and by 3.7% in 2027. We expect the residential sector to consume the most electricity in 2026 and 2027 even as commercial demand continues to grow at a faster rate.

We expect residential demand to grow by 2.9% in the summer of 2026 and by 1.0% in 2027. Summer power demand from the commercial sector grows by 2.6% in 2026 and by 5.8% in 2027, and summer power demand from the industrial sector grows by 0.9% in 2026 and 5.1% in 2027.

Summer renewables generation
We expect total electricity generation to increase by 1.2% to 4,325 BkWh in 2026 and by 3.4% to 4,470 BkWh in 2027. Generation growth this year is led by growth from renewable sources such as solar (17%), hydro (6%), and wind (5%).

Solar generation peaks in the summer months. In the summer of 2026, we expect solar power will generate 17% more electricity than it did last summer. In 2025, solar generation in the summer months surpassed wind generation for the first time, and that trend continues in our forecast. In the summer of 2027, we expect solar generation will grow by 22% to reach 178 BkWh, surpassing wind generation by almost 30%, although we still expect wind will generate more electricity than solar for the whole year.

We expect an increase in annual hydropower generation of 6% this year to 260 BkWh, with 6% growth in the summer months as well. A warmer than normal winter led to snow drought conditions across many western states, the area of the United States that relies most heavily on hydropower generation. However, overall precipitation in the region remained mostly near the 30-year normal over the winter months. As warmer months approach, reservoir levels particularly in the Northwest and California are mostly near capacity. This, along with other metrics, is a key factor contributing to our forecast of increasing hydro generation.

During the summer months, we expect generation from natural gas to remain flat compared with summer 2025 and generation from nuclear to increase by 2%, accounting for the planned Palisades restart.

Coal markets
Coal-fired electric power plants tend to build up their coal stocks in the spring and fall months when electricity demand is lower and plants undergo seasonal maintenance. During the first half of 2026 (1H26) we expect that U.S. electric power sector stocks will increase by an average of 3 million short tons (MMst) each month. In contrast, during 1H25 electric power sector coal stocks fell by an average of 2 MMst each month.

The main driver for the expected buildup in coal stocks during 1H26 is lower generation from coal-fired power plants. We expect the U.S. electric power sector to consume 180 MMst of coal for generation between January and June 2026, which would be 10% less than it consumed 1H25. Forecast coal production in 1H26 continues at the same pace as last year, totaling almost 260 MMst.

During 2H26, we expect a net draw of 1 MMst/month, similar to the same period in 2025. Forecast U.S. coal consumption for electricity generation in 2H26 totals 204 MMst, which is 6% lower than last year. Forecast U.S. coal production in 2H26 falls 5% year over year, similar to the consumption rate of decrease. We expect coal production to total 517 MMst for all of 2026.