Electricity Markets

EIA details record setting U.S. power generation in 2018

U.S. net electricity generation increased by 4% in 2018, reaching a record high of 4,178 million megawatt hours, the Energy Information Administration reported on March 6.

The data comes from EIA’s Electric Power Monthly. According to EIA, 2018 was the first time that total utility-scale generation surpassed the pre-recession peak of 4,157 million MWh set in 2007.

“Weather is the primary driver of year-to-year fluctuations in electricity demand. The increased demand for electricity in 2018 — including record demand in the commercial and residential sectors — is largely attributable to cold winters and a hot summer,” EIA reported in its “Today in Energy” report.

EIA said that population-weighted cooling degree days, an indicator of warm weather and air conditioning demand, reached a record high in 2018. Heating degree days, the corresponding indicator of cold weather and space heating demand, were also higher in 2018 than in recent years.

According to EIA, about 87 percent of U.S. households cool their homes in the summer with air conditioning, and about 35 percent of homes use electricity as their primary heating source during the winter. “The hot summer and relatively cold winter months of 2018 contributed to increased retail electricity sales to the sector, up 6% from the previous year,” EIA said.

Electricity use in commercial buildings is also affected by the weather but to a lesser degree, the federal agency said, adding that electricity sales to the commercial sector last year increased 2% from 2017.

“Electricity use in the industrial sector has been relatively unchanged in recent years, with 2018 electricity sales to this sector 3% lower than in 2017,” EIA said.

The remaining sales of electricity EIA tracks are used in transportation and routinely account for less than a quarter of a percent of sales.

In the long term, EIA projects that electricity consumption will continue to grow but at a slower pace than in recent decades.

Economic and population growth are the primary drivers of rising electricity demand, with the number of households growing 0.7% per year and commercial floorspace increasing 1.0% per year from 2018 through 2050 in EIA’s Annual Energy Outlook 2019 Reference case, EIA said.

Electricity sales to the residential and commercial sectors are expected to grow more slowly, at 0.4% and 0.5%, respectively, as improvements in technology and energy efficiency standards moderate electricity consumption growth.