U.S. power consumption is expected to decline in 2023 by about 1% compared to the record high reached in the previous year, the U.S. Energy Information Administration (EIA) reported in its Short-Term Energy Outlook (STEO) released on Tuesday.
This decline is expected to be a result of milder weather forecasts than is typically expected. This fall in demand, along with an increasing proportion of electricity generation from cheaper renewable energy sources and falling natural gas prices, is set to lower wholesale energy prices this year, the EIA observed.
According to the EIA’s report, electricity demand is expected to fall from a historic high of 4,048 billion kilowatt-hours (kWh) in 2022 to 4,000 billion kilowatt-hours (kWh) in 2023. The EIA expects, however, that power demand will recover in 2024, rising to a new historic high of 4,062 billion kWh in 2024 as the U.S. economic recovery gets underway.
With the United States’ capacity for power generation from renewable sources such as solar and wind on the rise, the EIA expects coal-fired power generation to fall to less than 17% in the spring of 2023.