The U.S. power grid nearly doubles in capacity from 2022 to 2050 to meet increasing demand for electric power, and most newly built capacity will be from renewable energy technologies, according to most cases in our Annual Energy Outlook 2023 (AEO2023). Declining capital costs for solar panels, wind turbines, and battery storage, as well as government subsidies such as those included in the Inflation Reduction Act (IRA), result in renewables becoming increasingly cost effective compared with the alternatives when building new power capacity. Economic growth, paired with rising electrification in end-use sectors, results in stable growth in U.S. electric power demand through 2050.
In our AEO2023, we explore long-term energy trends in the United States and present an outlook for energy markets through 2050. We use different scenarios, called cases, to understand how varying assumptions affect energy trends. These cases include:
In the Reference case, we project a large increase in renewable capacity of about 380% from 2022 through 2050. By comparison, fossil fuel generating capacity, which includes coal and natural gas-fired power plants, increases about 11%.
The economic growth and zero-carbon technology cost combination cases show the most extreme outcomes for growth of renewable and fossil fuel generating capacity out of all AEO2023 cases. The High Economic Growth and Low Zero-Carbon Technology Cost combination case has the highest projected growth in renewable capacity, increasing nearly 600% between 2022 and 2050.
Even in the Low Economic Growth and High Zero-Carbon Technology Cost combination case, which assumes the lowest growth in renewable technologies out of the AEO2023 cases, projected growth in renewable capacity approaches 230%.
The projected outcomes for both fossil fuel and renewable power plants are sensitive to the assumed cost of renewable technologies.
The projected outcomes for fossil fuel generating capacity also vary across AEO2023 cases. In the High Economic Growth and High Zero-Carbon Technology Cost combination case, fossil fuel capacity increases 36% between 2022 and 2050. In the Low Economic Growth and Low Zero-Carbon Technology Cost combination case, fossil fuel capacity decreases by 14% because more fossil fuel generators are retired than built over the projection period.
Principal contributor: Vikram Linga