The largest increase in electricity generation in the U.S. power sector this summer is expected to come from renewable energy sources, according to the U.S. Energy Information Administration’s May 2022 Summer Electricity Outlook report. Between June and August 2022, utility-scale solar generation will increase by 10 million MWh compared to the same period last summer, and wind generation will increase by 8 million MWh; coal and natural gas generation will be reduced by 26 million this summer MWh.
U.S. wind and solar power capacity has grown steadily in recent years. The U.S. power sector is expected to have 65 gigawatts of utility-scale solar capacity by early June, up 31 percent from a year earlier. Almost one-third of new solar capacity will be built in Texas. On-grid wind capacity in the power sector is estimated to reach 138 GW in June this year, a 12% increase from June last year.
Meanwhile, the U.S. is expected to add 6 gigawatts of natural gas combined cycle generation capacity by June 2022, a 2 percent increase from last summer. Despite the increase in capacity, national gas-fired power generation is expected to be slightly lower than last summer (1.3%).
The U.S. Energy Information Administration forecasts natural gas prices will average nearly $9 per million British thermal units between June and August 2022, which would be more than double last summer's average. Growth in natural gas prices and renewable energy generation will lead to a reduction in natural gas generation.
Compared to renewables and natural gas, the U.S. power industry has been steadily phasing out coal-fired power plants over the past decade. Between 2021 and June 2022, 6 GW (2%) of coal-fired capacity in the power sector will be retired.
In previous years, higher natural gas prices would typically lead to more coal-fired power generation. However, due to mine closures, rail capacity constraints and a tight labor market, the ability to replenish coal-fired power plants is limited. U.S. coal-fired power generation is expected to fall by 20 million megawatt-hours (7%) this summer.