According to the U.S. Energy Information Administration (EIA) website article published on February, 2023:
Electricity generation: EIA expects U.S. electric power generation to decline by 2% in 2023 before rising by a similar amount in 2024. At the same time, the makeup of the power generation mix will slightly shift. In the forecast, electricity produced from renewable sources rises from 22% of total generation in 2022 to 24% in 2023 and to 26% in 2024. The gains in the share of renewable energy generation will be driven by about 63 gigawatts (GW) of utility-scale solar generating capacity that developers have scheduled to enter service by the end of 2024 and about 13 GW of wind capacity that will come online during the same two years. EIA expects the new generating capacity from renewable sources to reduce output from fossil fuel-fired power plants. The combined share of U.S. generation provided by natural gas and coal in the forecast falls from 59% in 2022 to 54% in 2024. Coal generation declines the most; coal’s share falls from 20% in 2022 to 17% in 2024. Natural gas-fired generation’s share drops from 39% in 2022 to 37% in 2024.
More volatility in fuel costs creates uncertainty around how natural gas and coal-fired generation will respond to increased renewable generating capacity. After lowering the February forecast for near-term natural gas prices, the forecast share of natural gas generation for 2023 is now 39%, up from a forecast 2023 share of 38% in the previous STEO. Upcoming renewable capacity additions will limit the variation in natural gas generation to changes in fuel cost.
Coal Markets: Coal stocks increased 4% in January 2023 with less coal-fired electricity generation after warmer-than-average temperatures reduced overall electricity generation and falling natural gas prices increased natural gas-fired electricity generation. At the same time, monthly coal production rose in late 2022.
EIA expects U.S. coal production to decline by 13% to 518 million short tons (MMst) in 2023, after increasing in both 2021 and 2022, with a further 5% decline to 494 MMst in 2024. Primarily, EIA forecasts a 16% reduction in coal consumption by the electric power sector in 2023 followed by flat consumption in 2024. That decline largely reflects almost 9.6 GW of coal-fired capacity retirements in 2023, followed by another 2.8 GW closing in 2024. Two other factors will be the lower natural gas prices and 19% increase in renewable generation over those two years. Consequently, coal imports in the forecast decline by 47% from 2022 to less than 4 MMst in 2024. Exports of steam coal in the forecast increase from 39 MMst in 2022 to 45 MMst in 2024, due largely to greater demand in Europe. Coal from the United States is helping supply Europe following the EU’s ban of coal imports from Russia. U.S. coal exports also fulfill demand in Asia.
