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Short-Term Energy Outlook

Release Date: July 11, 2017  |  Next Release Date: August 8, 2017  |  Full Report    |   Text Only   |   All Tables   |   All Figures

Electricity

Electricity Consumption

According to the National Oceanic and Atmospheric Administration (NOAA), total U.S. cooling degree days (CDD) in the summer of 2016 (June, July, and August) surpassed the record set in the summer of 2011. NOAA projects U.S. CDD for the summer of 2017 will be about 9% lower than last summer, although still slightly above the average of the previous 10 summers.,

Milder summer temperatures, which reduce the need for air conditioning, drive EIA's forecast that the average U.S. residential customer will consume 5% less electricity this summer compared with the same period last year. Forecast average residential electricity sales between June and August range from about 2,000 kilowatthours (kWh) per customer in the Pacific census division to about 4,400 kWh per customer in the West South Central division.

EIA expects annual retail sales of electricity to the residential sector in 2017 will be 2.3% lower than sales in 2016 as a result of lower electricity consumption in the first and third quarters. Forecast annual electricity sales to the commercial sector are relatively unchanged this year from the 2016 level, because the effect of lower electricity consumption from milder weather offsets increased sales resulting from economic growth. Industrial sector electricity sales are expected to grow by 1.1% in 2017 after declining by 5.4% last year.

Electricity Generation

In 2016, annual U.S. electricity generation from natural gas surpassed generation from coal-fired power plants, the first time this has happened based on data going back to 1949. Natural gas supplied an estimated 34% of total U.S. electricity generation in 2016 compared with 30% for coal. The increase in the share of generation fueled by natural gas last year was driven by sustained low prices for natural gas. The U.S. average price for natural gas delivered to electric generators was $2.88/million British thermal units (MMBtu) in 2016.

Natural gas prices have risen since last year, with the delivered price to electric generators averaging $3.58/MMBtu during the first half of 2017. EIA estimates that the share of total U.S. generation fueled by natural gas during the first half of this year averaged 29%, down from nearly 34% during the same period last year. In contrast, coal's share of generation rose from 28% in the first half of 2016 to 30% in first half of 2017. Another reason for the decline in natural gas generation so far this year is the strong increase in conventional hydroelectric generation, particularly in the western states. The share of total generation in the West census division supplied from hydropower averaged an estimated 32% in the first half of 2017, compared with 27% during the first half of last year.

EIA expects a less pronounced change in generation shares during the second half of 2017. Natural gas is expected fuel 33% of total U.S. generation in the second half of 2017, compared with 34% during the second half of 2016. The delivered natural gas price to electric generators is expected to average $3.60/MMBtu between July and December 2017, up 46 cents from the same period in 2016. Coal's share of generation in the second half of 2017 is relatively unchanged from the second half last year at 32%.

Natural gas and coal are expected to fuel about the same amount of generation in 2018, with each providing slightly more than 31% of total U.S. generation. Renewable energy sources other than hydropower are forecast to supply nearly 10% of U.S. generation in 2018, up from slightly more than 8% in 2016.

Electricity Retail Prices

EIA forecasts that the U.S. retail electricity price paid by residential customers will average 13.2 cents per kWh this summer, up 3.7% from last summer, reflecting the increase in cost of fuels for generating electricity, particularly natural gas. This increase in prices mostly offsets the expected decline in summer electricity consumption, so that the average residential customer's electricity bill this summer is forecast to be 1.3% lower than last year.

U.S. Electricity Summary
  2015 2016 2017 2018
Retail Prices (cents per kilowatthour)
Residential Sector 12.65 12.55 12.98 13.41
Commercial Sector 10.64 10.37 10.48 10.62
Industrial Sector 6.91 6.75 7.01 7.19
Power Generation Fuel Costs (dollars per million Btu)
Coal 2.23 2.11 2.15 2.21
Natural Gas 3.23 2.88 3.59 3.94
Residual Fuel Oil 10.36 8.41 10.38 9.98
Distillate Fuel Oil 14.47 10.86 12.81 13.87
Generation (billion kWh per day)
Coal 3.705 3.388 3.453 3.474
Natural Gas 3.653 3.771 3.432 3.494
Nuclear 2.184 2.200 2.167 2.185
Conventional Hydroelectric 0.682 0.732 0.817 0.747
Renewable (non-hydroelectric) 0.809 0.939 1.035 1.098
Total Generation 11.172 11.145 11.022 11.126
Retail Sales (billion kWh per day)
Residential Sector 3.85 3.85 3.76 3.85
Commercial Sector 3.73 3.71 3.71 3.73
Industrial Sector 2.70 2.56 2.59 2.60
Total Retail Sales 10.30 10.14 10.07 10.20
Primary Assumptions (percent change from previous year)
Real DIsposable Personal Income 3.5 2.6 2.1 3.6
Manufacturing Production Index 0.2 0.2 2.0 2.5
Cooling Degree Days 14.5 4.6 -7.7 -5.5
Heating Degree Days -10.2 -5.1 0.4 8.5
Number of Households 1.0 0.9 1.1 1.2

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