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US Power Demand Predicted to Reach All-Time Highs in 2024 and 2025

US Power Demand Predicted to Reach All-Time Highs in 2024
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US Power Demand Predicted to Reach All-Time Highs in 2024
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US Power Demand Predicted to Reach All-Time Highs in 2024 and 2025

The U.S. Energy Information Administration (EIA) projects a significant surge in power consumption over the next two years, reaching record highs in 2024 and 2025. According to the EIA’s Short-Term Energy Outlook (STEO), power demand is expected to rise to 4,103 billion kilowatt-hours (kWh) in 2024 and reach 4,159 billion kWh in 2025. This trajectory represents a notable increase from the 4,000 billion kWh recorded in 2023 and the previous record of 4,067 billion kWh set in 2022.

Several factors contribute to this upward trend in power consumption. Growing demand from data centers, coupled with the increasing use of electricity for heating and transportation in both residential and commercial sectors, are significant drivers. The EIA forecasts that power sales in 2024 will see residential consumers accounting for 1,510 billion kWh, commercial customers for 1,396 billion kWh, and industrial customers for 1,048 billion kWh. These figures surpass previous highs recorded across these sectors.

Despite the rising demand for electricity, there are notable shifts in power generation sources. Natural gas is expected to maintain its share at 42% in 2024, similar to 2023, before slightly declining to 41% in 2025. Conversely, coal’s share is projected to decrease from 17% in 2023 to 16% in 2024 and further to 14% in 2025, while renewable energy output is anticipated to rise. The percentage of renewable generation is forecasted to increase from 21% in 2023 to 23% in 2024 and 25% in 2025, with nuclear power maintaining a steady share at 19% throughout the forecast period.

The declining use of coal for power generation is attributed to several factors, including its higher carbon emissions than natural gas and the decreasing cost competitiveness of coal relative to gas. Notably, the EIA projects that gas will be cheaper per million British thermal units (mmBtu) than coal in 2024 for the first time, with spot gas prices at the U.S. Henry Hub benchmark in Louisiana averaging $2.18 per mmBtu compared to $2.47 for coal.

In addition to these shifts in power generation sources, the EIA anticipates changes in gas sales across various sectors. While gas sales for power generation are expected to increase, those for industrial customers are projected to decline, reflecting broader energy consumption and production trends.

Overall, the EIA’s outlook underscores the dynamic nature of the U.S. energy landscape, characterized by evolving consumption patterns, shifts in power generation sources, and changing market dynamics affecting energy prices and sales across sectors.


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