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Short-Term Energy Outlook

Release Date: July 10, 2018  |  Next Release Date: August 7, 2018  |  Full Report    |   Text Only   |   All Tables   |   All Figures

Electricity

Electricity Consumption. For the first half of 2018, EIA estimates average residential retail sales of electricity were 7.5% higher than sales in the first half of 2017. Much of this higher electricity usage occurred in the first quarter, when U.S. temperatures were much colder than the mild winter of 2016–17. This trend was especially true in the West South Central states where first-quarter 2018 residential electricity sales were 21% higher than the same period in 2017, and in the South Atlantic states where first-quarter sales were 17% higher.

Warmer expected temperatures during the summer of 2018 compared with the summer of 2017 contribute to EIA’s forecast of 2.1% year-over-year growth in residential electricity sales during the second half of 2018. Forecast annual 2018 average electricity sales to the residential sector are 4.7% higher than the 2017 level. Residential electricity sales are forecast to decline 1.1% in 2019, based on a forecast of temperatures being closer to normal.

The relatively cold weather experienced earlier this year did not affect electricity consumption in the commercial sector as much as in the residential sector. In the first half of 2018, retail electricity sales to the commercial sector were 1.6% higher than in the first half of 2017. EIA expects commercial electricity sales during the second half of 2018 to be 0.4% higher than in the same period last year. Forecast annual electricity sales to the commercial sector grow by 1.0% in 2018 and fall by 0.1% in 2019.

Annual industrial electricity use, which declined in 2017, is forecast to grow by 0.5% in 2018 and by 0.6% in 2019. Retail sales of electricity to the industrial sector remained flat in the first half of 2018 compared with the same period last year, despite a 2.0% increase in manufacturing output by electricity-intensive industries compared with the first half of 2017. With manufacturing output by electricity-intensive industries expected to increase at a more rapid pace of 3.7% in the second half of 2018, EIA forecasts growth of 1.1% in industrial retail electricity sales during the second half of this year compared with the same period in 2017.

U.S. electricity consumption

Electricity Generation. EIA expects total U.S. electricity generation across all sectors to average 11.3 gigawatthours per day in 2018, which would be the highest level of generation since 2010. From 1980 through 2005, U.S. electricity generation grew by an average of 2.3% per year. However, power generation has grown relatively little on average since then, with year-to-year fluctuations related to weather. EIA forecasts U.S. electricity generation in 2018 will be 2.7% higher than last year but fall by 0.9% in 2019 as forecast temperatures return to normal levels.

The share of electricity generation supplied by natural gas-fired power plants has increased significantly over the past decade, rising from 24% of total U.S. generation in 2010 to nearly 32% last year. This increase in the share of generation has been offset by reduced generation from coal-fired power plants. Coal supplied 30% of U.S. generation in 2017, compared with nearly 45% in 2010. Much of this change in the mix of generation is a result of sustained low prices for natural gas, which have made that fuel competitive with coal.

EIA expects this trend in the U.S. generation mix to continue over the forecast period. The natural gas-fired share of generation is forecast to rise to 34% in 2018 and to 35% in 2019. In contrast, the forecast share of generation from coal-fired power plants falls to 28% this year and to 27% in 2019.

According to EIA’s Preliminary Monthly Electric Generator Inventory, power plant operators added 5 gigawatts (GW) of new natural gas-fired generating capacity during the first four months of 2018, with an additional 15 GW scheduled to come online through the end of the year. This addition would be the largest annual increase in natural gas capacity since 2004.

Most of the new natural gas capacity uses combined-cycle technology, which can be efficiently run for long periods of time. At current fuel costs, combined-cycle generating units are relatively competitive with coal-fired power plants. EIA forecasts the price of natural gas supplied to electric generators to rise by 1% in 2018 and the price of coal to rise at a similar rate.

The nuclear share of generation was 20% in 2017 and is forecast to be slightly less than 20% in 2018 and in 2019. Nonhydropower renewables provided slightly less than 10% of electricity generation in 2017 and are expected to provide more than 10% in 2018 and nearly 11% in 2019. The generation share of hydropower was 7% in 2017 and is forecast to be slightly less than that share in 2018 and in 2019.

U.S. electricity generation by fuel, all sectors

Electricity Retail Prices. The forecast U.S. retail electricity price for the residential sector averages 13 cents/kilowatthour in 2018, which is 0.5% higher than the average retail price last year. Forecast residential prices increase by an additional 2.7% in 2019. EIA expects commercial sector electricity prices to increase by 1.1% in 2018 and by 0.6% in 2019, while forecast industrial prices increase by 1.6% and 0.9% over the next two years, respectively.

U.S. residential electricity price

U.S. Electricity Summary
  2016201720182019
Retail Prices (cents per kilowatthour)
Residential Sector 12.5512.9012.9613.31
Commercial Sector 10.4310.6810.7910.86
Industrial Sector 6.766.917.027.09
Power Generation Fuel Costs (dollars per million Btu)
Coal 2.112.082.102.09
Natural Gas 2.873.383.413.35
Residual Fuel Oil 8.4610.9712.8813.40
Distillate Fuel Oil 10.8213.2616.3516.51
Generation (billion kWh per day)
Coal 3.3863.3093.1853.045
Natural Gas 3.7663.4873.8573.894
Nuclear 2.2012.2052.2132.186
Conventional Hydroelectric 0.7320.8220.7680.742
Renewable (non-hydroelectric) 0.9331.0611.1421.204
Total Generation 11.13810.99911.29611.195
Retail Sales (billion kWh per day)
Residential Sector 3.863.783.953.91
Commercial Sector 3.743.703.733.73
Industrial Sector 2.672.592.612.62
Total Retail Sales 10.2810.0910.3110.28
Primary Assumptions (percent change from previous year)
Real DIsposable Personal Income 1.41.22.23.0
Manufacturing Production Index -0.71.52.62.3
Cooling Degree Days 4.7-8.52.6-6.3
Heating Degree Days -5.1-1.211.0-1.5
Number of Households 0.41.11.11.1

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Related Figures
U.S. electricity consumption XLSX PNG
U.S. residential electricity price XLSX PNG
U.S. electricity generation by fuel, all sectors XLSX PNG
U.S. renewable energy supply XLSX PNG
U.S. carbon dioxide emissions growth XLSX PNG
U.S. summer cooling degree days XLSX PNG
U.S. winter heating degree days XLSX PNG
U.S. census regions and census divisions XLSX PNG
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