After 2045, renewables will generate more electricity than gas-fired power plants, according to the government’s Annual Energy Outlook (AEO2020). Overall the United States is seen adds 117 gigawatts (GW) of new wind and solar capacity between 2020 and 2023, as renewables grow faster than overall electricity demand.
Meanwhile, gas-fired generation retains its market share while coal and nuclear generation continue to decline.
“We see renewables as the fastest-growing source of electricity generation through 2050 as cost declines make them economically competitive beyond the expiration of existing federal and state policy supports,” noted U.S. Energy Information Administration (EIA) head Linda Capuano.
Coal power units – retrofit or retire
Although coal-fired and nuclear generation decline through the mid-2020’s as a result of retirements, generation from these sources stabilizes over the longer term as the more economically viable plants remain in service. Going forward, coal-fired plants must either invest in heat rate improvement technologies by 2025 or retire to comply with the Affordable Clean Energy (ACE) rule.
At projected Reference case prices, natural gas-fired generation is the marginal fuel source to fulfill incremental demand and increases in the later projection years, averaging 0.8% growth per year through 2050.
Electricity demand growth is seen average at 1 percent which is dampened through energy efficiency measures and higher self-generation through rooftop photovoltaic. The transportation sector still accounts for only a very small percentage of economy-wide demand because electric vehicles are still a minute, though growing market. According to EIA analysis, miles driven by e-vehicles would need to increase “substantially,” for e-cars and e-trucks to raise electricity demand by §more than a small fraction.”