Energy Brief: Energy Outlook Uncertain, Energy Storage Increases

Short-Term Energy Outlook Remains Uncertain

The U.S. Energy Information Administration (EIA) recently reported the Short-Term Energy Outlook continues to reflect increased levels of uncertainty due to pandemic business disruptions.

EIA forecasts a 2.4 percent drop in electricity consumption in the United States in 2020 compared with 2019, with the commercial sector sales falling 6.4 percent and industrial sector sales sinking 6 percent. The bright spot is a forecasted increase in residential sector retail sales of 3.5 percent in 2020. A mild winter earlier in the year was offset by increased summer cooling demand and more people working from home. Total U.S. electricity consumption in 2021 will be similar to the 2020 level of consumption according to EIA forecasts.

Renewable energy will be the fastest-growing source of electricity generation in 2020 according to EIA forecasts. Renewable energy sources will increase from 17 percent in 2019 to 20 percent in 2020 and are expected to rise to 22 percent in 2021.

EIA forecasts that hydroelectric power generation in the United States will grow 4 percent in 2020 from 2019 levels, despite drought conditions and wildfires in parts of the country. Droughts in the Pacific Northwest are being mitigated through the use of reservoirs and aren’t expected to impact hydroelectric power production.

Q2 2020 Energy Storage Deployment Breaks Previous Record

The U.S. energy storage sector had its strongest second quarter on record for deployments—only trailing the fourth quarter of 2019 for total installations—with 168 MW being deployed according to a Wood Mackenzie and U.S. Energy Storage Association report.

Pandemic business disruptions slowed commercial and industrial installations, while residential growth remained strong in California and Hawaii according to Utility Dive.

U.S. Coal-Fired Capacity and Utilization Decline

EIA reports coal-fired electricity generating capacity in the United States is retiring due to tighter air emissions standards and less expensive alternatives.

From 2011 to mid-2020, 95 GW of coal capacity was closed or switched to another fuel and another 25 GW is slated to shut down by the end of 2020 according to the EIA. As more coal-fired capacity is retired, plant owners are evaluating new operating models, including seasonal operation.

U.S. Sets Record for Daily Natural Gas Power Burn in Late July

In the United States, natural gas consumed by electric power plants set a daily record high of 47.2 billion cubic feet on Monday, July 27, according to an EIA report. On the same day, natural gas-fired generation in the continental U.S. reached an all-time high of 316 GW according to the same EIA report.

Of the electricity generated on the same day in the Lower 48 states, natural gas held the largest share at 45 percent, followed by coal with 24 percent, nuclear at 17 percent and renewable energy at 12 percent.