The U.S. Energy Information Administration (EIA) expects non-hydroelectric renewable energy resources, such as solar and wind, to be the fastest-growing source of U.S. electricity generation for at least the next two years.

EIA’s January 2019 Short-Term Energy Outlook (STEO) forecasts that electricity generation from utility-scale solar generating units will grow by 10% in 2019 and 17% in 2020. Further, according to the January STEO, wind generation will grow by 12% and 14% during the next two years. EIA forecasts total U.S. electricity generation across all fuels will fall by 2% this year and then show very little growth in 2020.

Source: EIA

EIA projects that the share of total U.S. electricity generation produced by all renewables other than hydropower will increase by three percentage points during the next two years, from 10% of total generation in 2018 to 13% in 2020.

This projected growth is a result of new generating capacity the industry expects to bring online, says EIA. About 11 GW of wind capacity is scheduled to come online in 2019, which would be the largest amount of new wind capacity installed in the U.S. since 2012. EIA expects electricity generated from wind this year will surpass hydropower generation. An additional 8 GW of wind capacity is scheduled to come online in 2020. The share of total U.S. generation from wind is projected to increase from 7% in 2018 to 9% in 2020.

Solar is the third-largest renewable energy source in the U.S. power sector, having surpassed biomass in 2017, according to EIA. The U.S. electric power sector plans to add more than 4 GW of new solar capacity in 2019 and almost 6 GW in 2020, representing a total increase of 32% from the operational capacity at the end of 2018. Because of this increase, solar is forecast to contribute slightly more than 2% of total utility-scale generation in 2020.

In addition to utility-scale solar in the electric power sector, some residences and businesses have installed small-scale solar photovoltaic systems to supply some of the electricity they consume. EIA forecasts that small-scale solar generating capacity will grow by almost 9 GW during the next two years, representing an increase of 44%.

Source: EIA

Even with the growth from renewable energy sources, fossil fuels will still provide most of the electricity generated in the U.S., the agency predicts. Coal and natural gas combined provided 63% of electricity generation in 2018, and EIA forecasts they will provide 61% in 2020.

Natural gas fueled 35% of total U.S. electricity generation in 2018, up from 24% in 2010. In contrast, the share of total generation from coal-fired power plants fell to 28% last year, compared with 45% in 2010. EIA forecasts the natural gas generation share will grow to 37% by 2020 and coal will continue declining to 24% by 2020.

Coal was the predominant generation fuel in the U.S. for decades, but in 2016, annual U.S. electricity generation from natural gas-fired power plants surpassed coal-fired generation, says EIA. Since then, natural gas has remained the primary source of electricity.

In addition to environmental regulations that have led to retiring or modifying U.S. coal power plants, the electric power sector’s switch to natural gas from coal has been driven by the sustained low cost of natural gas, according to EIA. Between 2016 and 2018, the price of natural gas delivered to electricity generators averaged about $3.25 per million British thermal units (MMBtu) compared with $5.09/MMBtu in 2010. Increased overall efficiency of the natural gas power plant fleet has also allowed natural gas to increase its market competitiveness.

Source: EIA

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