Electricity, coal, and renewables

Electricity consumption
After two decades of relatively flat electricity consumption in the United States, it grew by 2% last year, a trend we expect will continue in 2025 and 2026. Total forecast U.S. consumption of electricity grows by 86 billion kilowatthours (BkWh) in 2025 and by 77 BkWh in 2026, which is similar to the growth in 2024. We expect that retail sales of electricity into the industrial sector will increase fastest, growing by 2% in 2025 and by 3% in 2026. Forecast sales of electricity to the commercial sector increase by 2% annually in 2025 and 2026, reflecting increased electricity demand from data centers. Residential electricity consumption grows by 2% in 2025 and by 1% in 2026.

Electricity generation
U.S. generating capacity grows the most for solar power in the forecast, with the electric power sector adding 26 gigawatts (GW) of new utility-scale solar capacity in 2025 and 22 GW in 2026. We estimate that about 37 GW of solar capacity was added in 2024. As with capacity, we expect solar power will also be the leading source of growth in U.S. electricity generation. We expect these capacity additions will increase U.S. solar generation by 34 % in 2025, 75 BkWh, and by 17% in 2026, 49 BkWh.

New utility-scale battery storage projects are helping renewables integrate onto the power grid, with battery storage capacity growing by 47% (14 GW) in 2025 and 25% (11) GW in 2026. These storage projects charge and discharge over the course of the day, and they can help make use of energy from solar and wind generation during hours when those resources are not directly available.

Increased generation from no- or relatively low-marginal cost energy sources will lead to less generation from traditional fossil fuel generation sources. We expect U.S. generation from wind and hydropower to increase by a combined 38 BkWh in 2025 and by 31 BkWh in 2026. Generation from nuclear will increase by 14 BkWh in 2025 and 4 BkWh in 2026.

Natural gas is the largest source of electricity generation in the United States, and we expect that growth in generation from renewables will help decrease natural gas generation by 3% or 55 BkWh in 2025 and by another 1%, or 20 BkWh in 2026. Generation from coal-fired power plants remains relatively flat in both 2025 and 2026, even with some scheduled retirements, as coal generators become more competitive with natural gas generators, which we expect to face rising fuel costs.

Coal markets
An estimated 512 million short tons (MMst) of coal was produced in the United States during 2024, down 12% from 578 MMst in 2023. We forecast that coal production will continue its decline in 2025 but more slowly, falling to 476 MMst as utilities rely more heavily on inventories to meet demand. With coal inventories held by power plants forecast to fall to 103 MMst in 2025, we expect coal production to remain flat at 477 MMst in 2026, as demand from utilities is met by stockpiles. We expect electric power consumption to remain flat at nearly 370 MMst in 2025 and 2026, as higher natural gas prices help maintain coal generation even as retirements reduce capacity in 2025 and 2026 compared with 2024.

Coal exports in our forecast fall slightly from 107 MMst in 2024. We forecast U.S. coal exports to total 104 MMst in 2025 and 103 MMst in 2026, split nearly evenly between metallurgical (met) and thermal coal. We expect India to remain as a large destination for U.S. thermal and met coal. Factors that could weaken the outlook for coal exports include a strong dollar and relatively thin margins in the current global pricing environment, along with the prospect of increased thermal coal exports from other countries.