Electricity
- We expect U.S. sales of electricity to ultimate customers to rise by 2.7% in 2022, mostly because of more economic activity but also because of slightly hotter summer weather than last year. We forecast U.S. sales of electricity to fall by 0.9% in 2023.
- Increases in U.S. electricity generation in our forecast come almost entirely from solar and wind. We expect renewable sources will provide 22% of U.S. generation in 2022 and 24% in 2023, up from 20% in 2021.
- Natural gas fuels 38% of U.S. electricity generation in 2022, up from 37% in 2021, but we forecast it to fall back to 36% in 2023. Coal-fired electricity generation falls from 23% of the U.S. total last year to 20% in 2022 and 19% in 2023. Growing generation from renewable sources limits growth in natural gas-fired generation, and coal’s generation share declines because of the expected retirement of some coal-fired capacity.
- We forecast that wholesale electricity prices at major power trading hubs will be about 20-60% higher on average this winter. The highest wholesale electricity prices are likely to be in New England because of possible natural gas pipeline constraints, reduced fuel inventories for power generation, and uncertainty regarding liquefied natural gas (LNG) shipments given the tight global supply conditions.
- We forecast the U.S. residential price of electricity will average 14.9 cents per kilowatthour in 2022, up 8% from 2021. Higher retail electricity prices largely reflect an increase in wholesale power prices, which are driven by higher natural gas prices.
