Electricity
- We expect the share of electricity generation produced by natural gas in the United States will average 36% in 2021 and 35% in 2022, down from 39% in 2020. In 2021, our forecast share for natural gas as a generation fuel declines in response to our expectation of a higher delivered natural gas price for electricity generators, which we forecast will average $5.15/MMBtu compared with $2.39/MMBtu in 2020. As a result of the higher expected natural gas prices, the forecast share of electricity generation from coal rises from 20% in 2020 to about 24% in 2021 and 23% in 2022. For renewable energy sources, new additions of solar and wind generating capacity are offset somewhat by reduced generation from hydropower this year, resulting in the forecast share of all renewables in U.S. electricity generation to average 20% in 2021, about the same as last year, before rising to 22% in 2022. The nuclear share of U.S. electricity generation declines from 21% in 2020 to 20% in 2021 and 2022.
- Electricity generation from coal-fired power plants has not increased as much in response to rising natural gas prices as it has in the past, or by as much as our models forecasted in recent STEOs. The lower price responsiveness of coal for electricity generation, which is likely the result of constraints on coal supply and low coal stocks, is contributing to upward pressure on natural gas prices. To reflect the lower price responsiveness of coal-fired electricity generation, we have lowered our forecast for U.S. coal generation for the fourth quarter of 2021 and the first half of 2022 by an average of 7 billion kWh (9%) each month, and we have raised our forecast for natural gas generation 5 billion kWh (5%) each month.
- We forecast that planned additions to U.S. wind and solar capacity in 2021 and 2022 will increase electricity generation from those sources. We estimate that the U.S. electric power sector added 14.6 gigawatts (GW) of new wind capacity in 2020. We expect 17.1 GW of new wind capacity will come online in 2021 and 6.5 GW in 2022. Utility-scale solar capacity rose by an estimated 10.5 GW in 2020. Our forecast for added utility-scale solar capacity is 16.0 GW for 2021 and 18.3 GW for 2022. We expect significant solar capacity additions in Texas during the forecast period. In addition, we project that after increasing by 4.5 GW in 2020, small-scale solar capacity (systems less than 1 megawatt) will grow 5.8 GW and 7.8 GW in 2021 and 2022, respectively.
