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EIA: Higher Electricity Demand and Gas Prices to Affect 2024 Fuel Mix

by Krystal

The US Energy Information Administration (EIA) anticipates an increase in electricity generation from renewables and coal in the latter half of this year. This prediction comes as electricity demand rises and natural gas prices climb.

In its July Short-Term Energy Outlook (STEO), the EIA projects that natural gas prices will be about 36% higher in the second half of the year compared to the first half. This increase is expected to reduce electricity generation from natural gas, which is currently the largest fuel source for US electricity. Consequently, the EIA foresees a 2% rise in electricity demand in the second half of 2024 compared to the same period in 2023. To meet this demand, renewables and coal will need to produce more power.

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The EIA expects solar power generation to surge by 42% in the second half of the year compared to the same period in 2023. Wind power is projected to grow by 6%, hydropower by 3%, and coal by 3%.

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SEE ALSO: EIA Natural Gas Report: Timings and Impact

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The hotter-than-normal start to the year led to a 5% increase in US electricity generation in the first half of 2024 compared to the same period in 2023. This rise was due to increased air-conditioning use in response to higher temperatures. For the second half of the year, the EIA predicts about 2% growth in electricity generation. This growth will be driven by continued demand in the commercial sector, including data centers. However, it will be moderated by temperatures that are expected to remain similar to those in the second half of last year.

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