May 9, 2023 - The U.S. Energy Information Administration (EIA) expects that a slightly cooler summer in 2023 will lead to less demand for air conditioning than in 2022, slightly reducing overall demand for electricity this summer. In its May Short-Term Energy Outlook (STEO), EIA expects that despite less electricity demand this summer, more electricity will be generated from renewable sources and from natural gas throughout 2023.
EIA forecasts this summer will see the second-most U.S. natural gas consumption for electricity generation on record, surpassed only by last summer. EIA continues to expect significant growth in U.S. electricity generation from wind and solar, but the wet winter in California and the western United States should also increase electricity generated from hydropower during the coming months.
“The increasing share of renewables in the U.S. generation mix is a major feature of our electricity forecast this summer and through 2024,” said EIA Administrator Joe DeCarolis. “As electricity providers generate more electricity from renewable sources, we see electricity generated from coal decline over the next year and a half. We expect that the United States will generate less electricity from coal this year than in any year this century.”
EIA expects U.S. retail electricity costs will remain higher than before the COVID-19 pandemic. Those higher prices mean that even if households consume less electricity, their electricity bills are likely to be similar or slightly higher than last summer. EIA’s forecasts for U.S. electricity consumption and expenditures could be significantly affected by weather—especially if the summer months are hotter than forecast.
“Our forecast for the consumption of electricity and for the amount Americans pay for electricity this summer is highly dependent on weather,” DeCarolis said. “If this summer turns out to be warmer than we expect, we will see more demand for air conditioning, greater electricity use, and higher bills.”
EIA revised its forecasts for crude oil prices from its previous forecasts, now expecting the Brent spot price to average about $79 per barrel in 2023—down 7% from its April forecast. EIA expects U.S. gasoline prices to average near $3.40 per gallon this summer, down from its April forecast of $3.50 per gallon for the summer.
The full May 2023 STEO is available on the EIA website. EIA also published two Between the Lines supplements examining electricity generation from hydropower and forecasts for U.S. electricity bills.