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Short-Term Energy Outlook

Release Date: January 9, 2018  |  Next Release Date: February 6, 2018  |  Full Report    |   Text Only   |   All Tables   |   All Figures


Electricity Consumption. EIA expects annual retail sales of electricity to the residential sector in 2018 to be 2.9% higher than sales in 2017 primarily as a result of increased electricity consumption in the first quarter of 2018. Forecast annual electricity sales to the commercial sector are up 0.6% this year from the 2017 level. Industrial sector electricity sales are expected to grow by 0.4% in 2018. Forecast total U.S. consumption of electricity grows by 1.3% in 2018 and by 0.5% in 2019.

The weather last winter was mild throughout much of the United States. According to the National Oceanic and Atmospheric Administration (NOAA), total U.S. heating degree days (HDD) in the winter of 2016–17 were the third lowest on record. NOAA forecasts U.S. HDD for the winter of 2017–18 will be about 10% higher than last winter, but still 2% lower than the average of the previous 10 winters.

Expected colder winter temperatures, especially in the Midwest and Eastern states, drive EIA’s forecast that the average U.S. residential customer will consume 4% more electricity this winter compared with the same period last year. Forecast average residential electricity sales between October 2017 and March 2018 range from 3,700 kilowatthours (kWh) per customer in the New England census division (4% higher than last winter) to 7,000 kWh per customer in the East South Central census division (8% higher).

Electricity Generation. The amount of electricity generation from natural gas-fired power plants fell between 2016 and 2017, however natural gas remained the primary fuel for power generation for the second year in a row. Natural gas supplied an estimated 32% of total U.S. electricity generation in 2017, down from a share of 34% in 2016, in response to higher prices for the fuel. The U.S. average price for natural gas delivered to electric generators was $3.33/million British thermal units (MMBtu) in 2017, up 16% from the average price in 2016.

As reported on the EIA-860M survey, power plant operators are scheduled to bring 20 gigawatts (GW) of new natural-gas fired generating capacity online in 2018. This addition would be the largest increase in natural gas capacity since 2004. Most of this new capacity uses combined-cycle technology, which can be efficiently run for long periods of operation. Almost 6 GW of the capacity additions are being built in Pennsylvania, and more than 2 GW are being built in Texas.

EIA expects the price of natural gas for electricity generation in 2018 will be slightly lower than in 2017. The share of total generation produced by natural gas-fired power plants increases to 33% in 2018 as a result of new additions of natural gas generating capacity and an expected reduction in hydroelectric generation. Forecast natural gas prices for electric generators falls to $3.26 in 2019, contributing to EIA’s forecast that natural gas will fuel 34% of total generation next year.

In the Western states, EIA expects increased generation from natural gas to partially offset an expected reduction in hydroelectric generation during 2018. Last year, natural gas and hydropower each supplied between 26% and 27% of total generation in the West census region. The share provided by hydropower in the Western states is forecast to fall to 23% in 2018, and the share provided by natural gas is forecast to rise to 29%.

Coal supplied about 30% of total U.S. electricity generation in 2016 and 2017. EIA expects U.S. electricity generation from coal-fired power plants will fall to slightly below 30% in 2018. Power plant operators have reported on the EIA-860M survey that they plan to retire 13 GW of coal-fired capacity in 2018, primarily in the latter half of the year. EIA expects that these retirements and the forecast lower natural gas prices will reduce coal’s share of total U.S. generation to 28% in 2019.

EIA expects utility-scale generation from renewable energy sources other than hydropower to continue growing in 2018, albeit at a slower pace than in 2017. Nonhydro renewable energy sources, which supplied an annual average of 9.6% of total U.S. electricity generation in 2017, are forecast to supply more than 10% of annual average total U.S. generation in 2019 for the first time on record.

Nuclear generation contributed 20% of total generation in 2017 and is expected to supply a similar share this year. The scheduled retirement of reactors next year at the Three Mile Island and Pilgrim Nuclear power plants before the end of 2019 contribute to EIA’s forecast that the generation share from nuclear will fall to 19% in 2019.

Electricity Retail Prices. The U.S. retail electricity price for the residential sector averaged 12.8 cents/kWh in October 2017 (the latest historical data available), which was 3% higher than the average price in October 2016. EIA expects annual average residential electricity prices will increase by a further 2% in 2018 and 3% in 2019.

U.S. Electricity Summary
Retail Prices (cents per kilowatthour)
Residential Sector 12.5512.9213.2213.58
Commercial Sector 10.4310.6810.9210.97
Industrial Sector 6.766.947.157.22
Power Generation Fuel Costs (dollars per million Btu)
Natural Gas 2.873.333.283.26
Residual Fuel Oil 8.4610.6811.5911.76
Distillate Fuel Oil 10.8413.3815.0615.21
Generation (billion kWh per day)
Coal 3.3863.3183.2873.138
Natural Gas 3.7663.4933.6743.825
Nuclear 2.2012.2062.1852.148
Conventional Hydroelectric 0.7320.8210.7200.738
Renewable (non-hydroelectric) 0.9331.0581.0891.182
Total Generation 11.13911.00711.08711.163
Retail Sales (billion kWh per day)
Residential Sector 3.863.773.883.91
Commercial Sector 3.743.693.723.73
Industrial Sector 2.672.612.622.64
Total Retail Sales 10.2810.0910.2410.30
Primary Assumptions (percent change from previous year)
Real DIsposable Personal Income
Manufacturing Production Index
Cooling Degree Days 4.6-8.5-4.10.2
Heating Degree Days -5.1-1.711.2-0.6
Number of Households

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