Energy forecast predicts more demand and less coal supply

In its recent Short-Term Energy Outlook report, the U.S. Energy Information Administration (EIA) made its first forecasts of energy supply and demand in 2016. Demand is expected to increase slightly in 2016, while the share of coal-fired generation continues to fall.

EIA expects residential retail sales of electricity to decline by 0.3 percent in 2015, largely due to milder winter temperatures. Heating degree days during the first quarter of this year are forecast to be 12 percent lower than last year.

“Milder forecast temperatures during the early part of 2015 should translate to lower household use of ­electricity, especially for those households that use heat pumps for space heating,” the report said.

In meeting demand, electricity generation is expected to grow by 1.1 percent in 2015 and 0.9 percent in 2016, according to EIA. The share of coal-fired generation is expected to fall to 37.6 percent in 2016 from 39 percent in 2014 as generators continue to shutter coal plants and increase use of natural gas. To that end, the share of ­natural gas generation is expected to increase to 28.1 ­percent in 2016, up from 27.3 percent in 2014. The share of non-hydro renewable sources of electricity is expected to increase to 7.9 percent in 2016, up from 6.7 percent in 2014, according to EIA.

Although the share of utility-scale solar generation will remain less than 1 percent in 2016, utility solar capacity likely will increase by 60 percent. Despite the high growth, wind generation will remain the dominant non-hydro source of renewable power.

“Wind capacity, which grew by 10 percent between 2012 and 2014, is forecast to increase by about 23 percent between 2014 and 2016,” EIA said. “The absolute amount of the increase in capacity is more than twice that of solar: 15 GW of wind versus 6 GW of utility-scale solar.”

Source: CFC Solutions Scott Gates