The U.S. Energy Information Administration (EIA) anticipates a decrease in power consumption in 2023 following the record-high levels observed in the previous year. The primary driver of this expected decline is the forecast of milder weather conditions, which are likely to reduce the demand for both heating and cooling.
EIA's Short Term Energy Outlook (STEO) projects that power demand will decrease from the record 4,070 billion kilowatt-hours (kWh) recorded in 2022 to 4,022 billion kWh in 2023. Subsequently, it is expected to rebound to 4,116 billion kWh in 2024 as economic growth gains momentum.
In terms of power sales, EIA forecasts a drop to 1,468 billion kWh for residential consumers and 1,385 billion kWh for commercial customers in 2023, with industrial customers witnessing an increase to 1,021 billion kWh. This contrasts with the all-time highs recorded in 2022, including 1,509 billion kWh for residential consumers, 1,391 billion kWh for commercial customers, and 1,064 billion kWh for industrial customers back in 2000.
The EIA's outlook also examines the energy mix. It predicts a rise in the natural gas share of power generation from 39% in 2022 to 42% in 2023 before declining slightly to 41% in 2024. In contrast, coal's share is expected to decline from 20% in 2022 to 16% in 2023 and further to 15% in 2024, primarily due to increased natural gas and renewable energy output.
Renewable generation is on an upward trajectory, with the percentage expected to increase from 21% in 2022 to 22% in 2023 and further to 24% in 2024. Meanwhile, nuclear power's share is projected to remain steady at 19% in 2022, 2023, and 2024.
The report also delves into natural gas sales, with projections indicating a decline to 12.60 billion cubic feet per day (bcfd) for residential consumers, 9.24 bcfd for commercial customers, and 23.35 bcfd for industrial customers in 2023. Conversely, sales for power generation are expected to increase to 35.30 bcfd. These estimates compare with historical peaks, including 14.32 bcfd in 1996 for residential consumers, 9.63 bcfd in 2019 for commercial customers, 23.80 bcfd in 1973 for industrial customers, and 33.13 bcfd in 2022 for power generation.
The overall outlook suggests that milder weather patterns will have a notable impact on power consumption trends in the United States, and the energy mix is continually evolving as the country aims to meet its sustainability and emissions reduction goals.
