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Forecast: Electricity demand down this summer but natural gas-powered generation to improve

Staff Reports

Although overall U.S. electricity demand this summer is expected to fall to levels not seen since 2009, natural gas-fired power plants will see slightly higher generation, according to the U.S. Energy Information Administration (EIA).

EIA expects U.S. electricity demand to total 998 billion kilowatthours (kWh) from June through August, which would be the lowest level of summer electricity consumption in the United States since 2009 and 5% less than last summer.

This is largely because of efforts to slow the spread of COVID-19, and the resulting decline in commercial and industrial electricity usage. However, EIA predicts resident electricity sales to grow by 3% because more people are working from home and following social distancing recommendations.

Typically, weather is one of the primary factors in determining electricity demand in the residential and commercial sectors.

EIA expects that natural gas-fired power plants will generate 467 billion kWh this summer, slightly higher than natural gas generation last summer (460 billion kWh).

Forecast natural gas prices remain low this summer, making it relatively more economical than coal for power generation. EIA forecasts natural gas’s share of electricity generation to increase from 41% last summer to 44% this summer.

Coal continues its downward trend in its contribution to U.S. power generation, and EIA expects its generation share will fall from 24% of the electricity generated during summer 2019 to 17% this summer.