Renewable Energy’s Share of Power Generation to Jump: EIA

The U.S. Energy Department’s Energy Information Administration (EIA) has forecast that renewable energy resources’ share of the U.S. power generation market will increase from 7 percent in 2015 to 9 percent in 2017, largely at the expense of coal- and natural gas-fired generation

"The mix of generating units that supply electricity in the United States is undergoing a significant transformation," EIA says in its January Short-Term Energy Outlook, the first to include forecasts for 2017. According to EIA, many older coal plants are being decommissioned as the industry adapts to sustained low costs of natural gas generating units and the effects of environmental regulations.

EIA estimates that at least 14 gigawatts (GW) of coal-fired capacity were retired during 2015. That was equal to nearly 5 percent of the operable coal capacity existing at the end of 2014. It forecasts that coal's share of the power generation market will fall from 34 percent to 33 percent between 2015 and 2017.

While EIA forecasts that coal consumption in the electric power sector will remain relatively unchanged in 2016, forecast increases in nuclear (1 percent), hydropower (8 percent) and other renewable-based (12 percent) electricity generation in 2017 will contribute to a 1 percent decline in electric power sector coal consumption.

Henry Hub spot prices for natural gas are forecast to rise through much of 2016, primarily reflecting consumption growth from the industrial sector, which is expected to outpace production growth, EIA says. The EIA projects natural gas' power generation share to fall to 31.4 percent by 2017 as generation from renewable energy sources increases.

Among renewables:

The forecast share of total generation supplied by hydropower is expected to rise from 6 percent in 2015 to 7 percent in 2017.

Wind capacity is forecast to increase by 14 percentin 2016 and by 3 percent in 2017.

Utility-scale solar power generation is projected to average 129 gigawatthours per day in 2017, an increase of 45 percent from 2016, and will comprise 1.1 percent of total U.S. electricity generation in 2017.

Biodiesel production, which averaged an estimated 85,000 barrels per day (b/d) in 2015, is forecast to increase to 107,000 b/d in 2016 and 112,000 b/d in 2017.