Natural gas, renewables projected to provide larger shares of electricity generation

May 4, 2015

Source: U.S. Energy Information Administration,

Republished 1:15 p.m. May 4, 2015 to correct an error in the graph.

EIA’s (AEO2015) Reference case projects that electricity consumption will increase at an average annual rate of 0.8% from 2013 to 2040, nearly in line with expected population growth. Continuing a recent trend toward lower levels of carbon-intensive generation, natural gas and renewable generation meet almost all of the increase.

Electricity generation from renewable sources provided 13% of U.S. electricity in 2013. In the AEO2015 Reference case, which reflects current laws and regulations—but not pending rules, such as the Environmental Protection Agency’s —this percentage is projected to increase to 18% by 2040.

Wind and solar generation account for nearly two-thirds of the growth in renewable generation. Solar is the fastest-growing renewable generation source, but wind accounts for the largest absolute increase in generation. Wind becomes the single largest source of renewable generation by 2040, supplanting hydropower as the largest renewable generation source. New solar photovoltaic capacity drives nearly all of the growth in solar generation, with increases coming from both the electric power sector and end-use sectors such as distributed or customer-sited generation (i.e., rooftop installations).

Source: Source: U.S. Energy Information Administration,
Note: MSW = municipal solid waste; LFG = landfill gas

The natural gas share of total generation also grows, from 27% in 2013 to 31% in 2040 in the Reference case, while the coal share declines from 39% in 2013 to 34% in 2040, and the nuclear share drops from 19% to 16% over the projection period.

Natural gas-fired generation is highly dependent on natural gas prices as a result of competition with existing coal plants and renewables. The AEO2015 includes several cases with varying fuel prices and economic growth assumptions. In the High Oil and Gas Resource case—where greater oil and natural gas resources lead to delivered natural gas prices to the electric power sector being 44% below the Reference case in 2040—natural gas becomes the leading source of generation by 2020 and accounts for 42% of total generation by 2040.

Source: Source: U.S. Energy Information Administration,

Growth in new renewable generation is also sensitive to natural gas prices. Lower natural gas prices in the High Oil and Gas Resource case result in fewer renewable capacity additions toward the end of the projection period and lower generation compared with the Reference case. Higher macroeconomic growth results in an increase in both natural gas and renewables generation, as higher electricity demand requires more generation from marginal sources, while lower macroeconomic growth has the opposite effect.

Principal contributors: Gwen Bredehoeft, Laura Martin

Not Ready to Buy or Sell Your Equipment?

Join our international network of oilfield buyers & sellers! 
We respect your privacy as well as your time and that's why we only send our newsletter no more than TWICE A MONTH.
 
ADD ME TO THE LIST
Two emails per month (maximum). No ads. No affiliate links.
close-link

We offer both Domestic and International Options for Oilfield Equipment. Not All Equipment is Listed. Please contact us for current inventory list. Dismiss