Solar generation continues expand rapidly on the U.S. grid while coal continues its decline
Energize Weekly, January 17, 2024
Solar and coal-fired electricity generation are continuing to head in opposite directions over the next two years with solar being the leading source of new generation and coal activity falling to 1960s levels, according to the U.S. Energy Information Administration (EIA).
The EIA said it expects solar to add 36 gigawatts (GW) of new capacity in 2024 and another 43 GW in 2025. The new capacity will boost solar’s overall share of generation to 7 percent in 2025 up from 4 percent in 2023.
Total solar generation grows over the next two years 75 percent to 286 billion kilowatt-hours, according to the EIA Short-term Energy Outlook.
“Driven by our forecast of rising generation from solar and to a lesser extent wind, we expect that electricity generation from coal will decline by 9 percent in 2024 and by 10 percent in 2025, due to a combination of higher costs compared with renewables and another 12 GW of coal-fired capacity retiring over the next two years,” the agency said.
Wind’s share of total generation ticks up just 1 percent to 12 percent in 2025, and battery storage will help “smooth” the variable generation of wind and solar, posting an 80 percent increase, 14 GW, in 2024 and another 9 GW in 2025 for a total capacity of 40 GW.
Natural gas-fired generation is projected to remain unchanged in 2024 and 2025 compared with 2023, the agency said.
Coal production and coal’s share of generation are both forecast to fall, according to the energy outlook. Coal production is slated to fall 16 percent in 2024 to 489 million short tons and then drop to 429 million short tons in 2025.
These are production levels not seen since the 1960s, the EIA said.
“The decrease in production is driven primarily by our forecast of an 8 percent decline in U.S. coal consumption in each year of the forecast,” the EIA said.
Coal-fired generation’s share of total U.S. generation will fall to 13 percent in 2025 from 22 percent in 2023.
The cost of coal for U.S. electric power generation is expected to drop by 5 percent in 2025 to $2.40 per million British thermal units compared to January 2024 prices.
“Although cheaper on an energy basis than natural gas for most of the months leading up to December 2025, coal is more expensive when accounting for the greater thermal efficiency of natural gas,” the energy outlook said. “For example, new, efficient combined-cycle gas turbine (CCGT) plants currently entering service use about 65 percent of the primary energy input of a coal-fired plant to provide the same generation.”
Long-term trends, as projected by the National Renewable Energy Laboratory (NREL), reenforce the EIA’s short-term outlook.
In NREL’s standard scenario assessment, released Jan. 9, the midpoint or baseline scenario shows rapid growth in wind and solar through 2050 and some steady increase in natural gas-fired generation.
By 2050, the NREL scenario projects a tenfold growth in solar to 1,100 GW and a five-time increase in wind to 750 GW. Natural gas-fired generation grows by about 200 GW.
The scenario considers nascent technologies such as natural gas with carbon capture, coal with carbon capture, hydrogen combustion turbines and small nuclear reactors, but they account for less than 1 percent of generation by 2050.
“The goal of the standard scenarios is to give an annually updated picture of where the U.S. electric grid may be headed,” Pieter Gagnon, an NREL researcher and lead author, said in a statement.
