According to a recent report from the Energy Information Administration (EIA), solar and wind power combined are projected to generate more electricity than coal for the first time in the United States. This shift is a testament to the growing role of renewable energy in the country’s power generation landscape.
The EIA highlights the significant growth of solar photovoltaic (PV) capacity as a key driver behind this trend. In fact, solar is now considered the “fastest growing source” of electric power generation in the U.S. With an expected increase of 39% in solar generation from 2023 to 2024, it is evident that solar energy is on a continuous upward trajectory.
This forecast aligns with a recent report by Deloitte, which also predicts that the solar market will lead the way in the renewable energy industry next year. The report emphasizes the rapid growth and significant contributions of renewables, specifically solar PV, to electricity generation.
The declining role of coal-fired power plants is another factor outlined by the EIA. The forecast attributes this decline to the rise of renewable energy sources, lower natural-gas prices, and ongoing retirements of coal-fired plants. As a result, coal-fired generation is expected to be surpassed by the combined generation of solar and wind power in 2024, marking a significant milestone.
Furthermore, the EIA has adjusted its 2024 forecast for U.S. natural-gas prices. These revisions demonstrate the evolving energy landscape and the shifting dynamics within the industry.
In summary, renewable energy, especially solar photovoltaics, is experiencing rapid growth and playing a substantial role in electricity generation. With solar and wind set to surpass coal for the first time in the U.S., it is clear that renewable energy is becoming an increasingly dominant force in the country’s power sector.
Energy Price Forecasts
The U.S. Energy Information Administration (EIA) has adjusted its projections for natural gas and oil prices in the coming years. According to the agency, U.S. Henry Hub spot prices are expected to reach $2.79 per million British thermal units in the following year. This is a decrease of 14.3% compared to the EIA’s previous forecast in November.
The revised forecast is attributed to a milder-than-average winter, which has resulted in reduced demand for space heating in residential and commercial sectors. Additionally, the continued high levels of natural gas production have contributed to the downward revision.
With record domestic natural gas production and lower-than-expected demand, it is anticipated that prices will decline further during the winter season.
In addition to the adjustment in natural gas prices, the EIA has also revised its projections for oil prices. The agency has reduced its 2024 price forecasts for U.S. benchmark West Texas Intermediate (WTI) oil by 12.5% to $78.07 a barrel. It has also lowered its forecast for global benchmark Brent oil by 11.4% to $82.57 a barrel.
Current oil prices reflect this downward trend, with front-month January WTI oil futures settling at $71.32 a barrel on the New York Mercantile Exchange. Similarly, February Brent settled at $76.03 on ICE Futures Europe.
Despite these decreases, the EIA anticipates that crude-oil prices will experience upward pressures in the coming months. This is due to the expected decline in global oil inventories, particularly in the first quarter of 2024. The recently announced OPEC+ production cuts are expected to contribute to this decline.
The EIA is set to release its next Short-term Energy Outlook report on January 9th, which will provide further insights and forecasts for the energy sector through 2025.