Electricity
- We forecast that retail sales of electricity in the United States will increase by 2.3% in 2021 after falling by 3.9% in 2020. The largest increase in consumption will occur in the residential sector, where we forecast retail sales of electricity will grow by 2.8% this year. This growth is primarily a result of colder temperatures in the first quarter of 2021 compared with the same period in 2020. Much of the forecast increase in electricity consumption in the commercial and industrial sectors reflects improving economic conditions in 2021. We expect retail electricity sales to these two sectors combined will increase by 2.0% in 2021. For 2022, we forecast that U.S. retail sales of electricity will grow by another 1.4%.
- We expect the share of electric power generation produced by natural gas in the United States will average 36% in 2021 and 35% in 2022, down from 39% in 2020. The 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 $4.09/MMBtu in 2021 compared with an average of $2.39/MMBtu in 2020. As a result of the higher expected natural gas prices, the forecast share of generation from coal rises from 20% in 2020 to 23% this year but falls to 22% next year. New additions of solar and wind generating capacity support our expectation that the renewables share of U.S. generation will rise from 20% in 2020 to 21% in 2021 and to 23% in 2022. The nuclear share of U.S. electricity generation declines from 21% in 2020 to 20% in 2021 and to 19% in 2022 as a result of retiring capacity at some nuclear power plants.
- We forecast that planned additions to U.S. wind and solar generating capacity in 2021 and 2022 will contribute to rising electricity generation from those sources. We estimate that the U.S. electric power sector added 14.8 gigawatts (GW) of new wind capacity in 2020. We expect 16.0 GW of new wind capacity will come online in 2021 and 5.3 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 15.5 GW 2021 and 16.6 GW for 2022. We expect significant solar capacity additions in Texas during the forecast period. In addition, 4 GW to 5 GW of small-scale solar capacity (systems less than 1 megawatt) will come online each year during the 2021–22 STEO forecast.
