The U.S. Energy Information Administration (EIA) projects that power consumption in the United States will hit record levels in 2024 and 2025, according to its Short Term Energy Outlook (STEO) released on Tuesday.
The EIA forecasts a rise in power demand to 4,123 billion kilowatt-hours (kWh) in 2024 and 4,198 billion kWh in 2025, up from 4,000 billion kWh in 2023 and the previous record of 4,067 billion kWh in 2022.
The surge in electricity usage is attributed to increasing demand from artificial intelligence, data centers, as well as higher consumption in homes and businesses for heating and transportation purposes.
For 2024, residential power sales are projected to reach 1,504 billion kWh, with commercial customers expected to consume 1,418 billion kWh and industrial customers 1,052 billion kWh. This compares with peak consumption levels of 1,509 billion kWh for residential users in 2022, 1,391 billion kWh for commercial users in 2022, and 1,064 billion kWh for industrial users in 2000.
The EIA anticipates a shift in power generation sources, with natural gas' share decreasing slightly from 42% in 2023 to 41% in 2024 and 40% in 2025. Meanwhile, coal's share is expected to hold steady at 17% in 2024, before dropping to 16% in 2025 as renewable energy output increases.
Renewable energy generation is projected to rise from 21% in 2023 to 23% in 2024 and further to 25% in 2025, while nuclear power will maintain a share of 19% across 2023, 2024, and 2025.
Despite a long-term decline in coal usage for power generation due to lower emissions from natural gas, the EIA forecasts a temporary uptick in coal usage in the latter half of 2024 due to higher natural gas prices.
“Utilities are expected to seek more cost-effective alternatives as natural gas prices rise,” said EIA Administrator Joe DeCarolis in a statement. “Renewables, particularly solar, are anticipated to bridge much of the gap in the power mix. Additionally, utilities may turn to coal as a cheaper fuel source for the remainder of the year.”
In terms of natural gas sales, the EIA projects 12.3 billion cubic feet per day (bcfd) for residential consumers, 9.30 bcfd for commercial customers, and 35.7 bcfd for power generation in 2024. Industrial customers are expected to consume 23.1 bcfd of natural gas. These figures compare with historical peaks of 14.3 bcfd for residential consumers in 1996, 9.6 bcfd for commercial customers in 2019, 23.8 bcfd for industrial customers in 1973, and 35.4 bcfd for power generation in 2023.
