The U.S. Energy Information Administration (EIA) said on Tuesday in its Short-Term Energy Outlook (STEO) that the country’s power use is expected to drop by about 1% in 2023 compared to the previous year. This is because milder weather will slow usage from the record high reached in 2022.
From a historic high of 4,048 billion kilowatt-hours (kWh) in 2022, the EIA predicts that electricity demand will drop to 4,000 billion kilowatt-hours (kWh) in 2023 before rising to 4,062 billion kWh in 2024 as the economy grows.
The EIA predicts that wholesale power prices will go down this year because there will be less demand, more electricity will be made from cheap renewable sources, and the price of natural gas will go down.
Coal-fired Power Generation Will Be 17% Less
In Texas’s ERCOT power market, the on-peak wholesale price at the North hub is expected to average about $35 per megawatt-hour (MWh) in 2023, down from an average of almost $80/MWh in 2022.
The EIA predicts that coal-fired power generation will be 17% less in the spring of 2023 than it was in the spring of 2022. This is because renewable energy sources like solar and wind are becoming more powerful and natural gas prices are going down.
The EIA said that coal will generate about 17% of all U.S. electricity this year, which is less than the 20% it did last year.
The amount of power that comes from natural gas is expected to stay about the same at 39% this year. The share of electricity that comes from nuclear power is expected to go from 19% in 2022 to 20% this year. The amount of energy made from renewable sources is expected to grow the most, from 22% last year to 24% this year.
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