Electricity
- The largest increases in U.S. electricity generation in the next two years are likely to come from renewable energy sources, driven by expanded generating capacity from these sources. We expect renewable energy will provide 22% of U.S. generation in 2022 and 24% in 2023, up from a share of 20% last year. Solar capacity additions in the electric power sector total 20 gigawatts (GW) for 2022 and 22 GW for 2023. Solar PV installation delays from 2022 to 2023 account for about 1 GW of the expected installed solar capacity. We expect that small-scale (systems less than 1 GW) solar capacity will grow to a total of 39 GW by the end of 2022 and to 46 GW in 2023.We estimate that wind capacity additions in the U.S. electric power sector will total 11 GW in 2022 and 5 GW in 2023.
- The continued retirement of coal-fired generating capacity in the United States contributes to our forecast that the share of electricity generation from coal will decline from 23% in 2021 to 21% in 2022 and to 20% in 2023. The coal fleet has been facing constraints in raising its share of generation despite high natural gas prices. The constraints include limited rail capacity for fuel delivery, low coal stocks at power plants, reduced coal mining capacity, and rising generation from renewable sources.
- Although we expect annual U.S. natural gas fuel costs for electricity generators will increase 59% in 2022, we do not expect a significant decline in generation from natural gas-fired power plants because of the limited ability of coal power plants to act as an alternative source of generation. We forecast the U.S. natural gas generation share will average 37% in 2022, about the same as last year. The forecast natural gas share averages 36% in 2023 as the share of generation from renewable sources increases.
- We forecast the U.S. residential electricity price will average 14.6 cents/kWh between June and August 2022, up 4.8% from summer 2021. The forecast summer commercial sector price averages 12.0 cents/kWh (up 4.7%) and the forecast industrial sector price averages 7.7 cents/kWh (up 3.2%). Higher retail electricity prices largely reflect higher wholesale power prices and higher natural gas prices. We expect the summer increases in retail residential electricity prices will range from an increase of 2.4% in the West South Central region to a 16.1% increase in New England.
