According to the U.S. Energy Information Administration (EIA) website article published in April 2023:
Electricity markets
During the spring months (March–May), U.S. electricity demand is usually at its lowest because the need for both air conditioning and space heating declines. Power plant operators take advantage of this lull in consumption to perform necessary maintenance on their generating units, especially for thermal plants—both coal and gas-fired—and nuclear generators. In contrast, output from renewable sources, especially wind, usually increases in the spring due to stronger winds.
Even with normally low seasonal generation, EIA expects that coal-fired power plants will provide significantly less generation this spring than in past years. EIA forecast 17% less U.S. coal-fired generation in the spring of 2023 than in the spring of 2022. Coal plants that retired in the past year will reduce coal-fired generating capacity by about 11 gigawatts (5%) compared with the spring of 2022. In addition, EIA expects existing coal generators to operate at lower utilization rates this spring in response to lower natural gas prices.
Nuclear reactors are taken offline every 18 or 24 months for refueling and general maintenance. The timing of the cycles means that fewer reactors will need to refuel in the United States this spring than last spring. As a result, EIA forecast about the same amount of nuclear generation in spring 2023, 1% more than during the same months last year. This fairly stable amount of generation should occur despite the Palisades nuclear plant’s retirement in Michigan last summer. A new reactor is scheduled to come online at the Vogtle plant in Georgia by July 2023, which will be the first addition to the U.S. nuclear generating fleet since 2016.
EIA expects coal will provide an average of 17% of total U.S. generation this year, down from 20% last year. The share of total generation supplied by natural gas remains about the same this year at 39%. The nuclear share of generation rises slightly from 19% in 2022 to 20% this year. Generation from renewable energy sources grows the most in the forecast, increasing from a share of 22% last year to 24% this year. Much of the growth in renewables generation comes from an additional 27 gigawatts of new solar capacity this year, up 38% from last year.
Lower natural gas costs are major driver of our forecast that wholesale power prices in 2023 will fall from last year. For example, EIA expects the on-peak wholesale price at the North hub in Texas’s ERCOT power market will average about $35 per megawatthour (MWh) this year compared with an average of nearly $80/MWh last year.
Coal markets
U.S. coal production increased 9%, from more than 46 million short tons (MMst) in February to almost 51 MMst in March. However, EIA expects increases will be temporary, and annual U.S. coal production declines by 6% from last year in our forecast to less than 560 MMst this year, with a further 9% decline next year. Among the drivers of the steady decline is the ongoing retirement of coal-fired generating plants, low natural gas prices, and growing renewable generation. EIA expects 11 GW of coal-fired capacity will retire and 77 GW of new wind and solar capacity will come online from the end of 2022 to the end of 2024. Low natural gas prices decrease coal’s competitiveness compared with natural gas for electricity generation. EIA expects the declines in coal consumption by the power sector will increase coal inventories at power plants in the coming months, because some power plants will continue to take delivery of coal purchased under contract for future delivery. However, EIA expects high inventory levels heading into 2024 to contribute to the accelerating declines in coal production next year.
