The Energy Information Administration‘s latest short-term energy outlook for July predicts increased demand and higher costs across various sectors. Electricity demand is projected to rise by 2% in the second half of 2024 compared to last year. Natural gas prices are expected to surge by about 36% in the latter half of the year compared to the first half, prompting a forecasted 42% increase in solar electricity generation during the same period.
EIA Administrator Joe DeCarolis highlighted the potential gap between electricity demand and production due to higher natural gas prices. He anticipates utilities will turn to more cost-effective alternatives, primarily renewable sources like solar, which have seen significant capacity growth in recent years. Additionally, coal may be utilized more extensively as a cheaper fuel option for the remainder of the year.
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Meanwhile, the price of Brent crude oil is anticipated to rise to $89 per barrel in the second half of 2024 and average $91 per barrel in the first quarter of 2025, up from an average of $84 per barrel in the first half of 2024. The EIA cautioned that severe weather events, such as Hurricane Beryl, which recently hit the Texas Gulf Coast, could impact future energy outlooks. The agency will continue to monitor the hurricane’s effects on critical infrastructure in this key energy region and update its forecasts accordingly.