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EIA Forecasts Electric Consumption in U.S. to Continue to Grow in 2025, 2026

After almost two decades of relatively little change, consumption of electricity grew by 2% in the United States during 2024, “and we forecast it will continue growing at that rate in 2025 and 2026,” the U.S. Energy Information Administration said on Jan. 15.

If electricity consumption grows in each of the next two years, it would mark the first three years of consecutive growth since 2005–07, though this result could be affected significantly by weather, EIA said in its Short-Term Energy Outlook. “The growth in electricity consumption in our forecast is mostly the result of growing power demand in the commercial and industrial sectors,” it noted.

Total forecast U.S. consumption of electricity grows by 86 billion kilowatthours (BkWh) in 2025 and by 77 BkWh in 2026, which is similar to the growth in 2024, EIA said.

“We expect that retail sales of electricity into the industrial sector will increase fastest, growing by 2% in 2025 and by 3% in 2026. Forecast sales of electricity to the commercial sector increase by 2% annually in 2025 and 2026, reflecting increased electricity demand from data centers. Residential electricity consumption grows by 2% in 2025 and by 1% in 2026.”

Generating Capacity Outlook

U.S. generating capacity grows the most for solar power in the forecast, with the electric power sector adding 26 gigawatts of new utility-scale solar capacity in 2025 and 22 GW in 2026.

EIA estimates that about 37 GW of solar capacity was added in 2024. “As with capacity, we expect solar power will also be the leading source of growth in U.S. electricity generation. We expect these capacity additions will increase U.S. solar generation by 34% in 2025, 75 BkWh, and by 17% in 2026, 49 BkWh.”

New utility-scale battery storage projects are helping renewables integrate onto the power grid, with battery storage capacity growing by 47% (14 GW) in 2025 and 25% (11) GW in 2026, EIA said.

It expects U.S. generation from wind and hydropower to increase by a combined 38 BkWh in 2025 and by 31 BkWh in 2026.

Generation from nuclear will increase by 14 BkWh in 2025 and 4 BkWh in 2026, it said.

Generation from coal-fired power plants remains relatively flat in both 2025 and 2026, even with some scheduled retirements, as coal generators become more competitive with natural gas generators, which we expect to face rising fuel costs, EIA said.

Natural gas supply and demand

Over the next two years, EIA expects that natural gas demand in the United States will generally grow by more than natural gas supply.

In 2025, it forecasts supply of natural gas, including both production and imports, will rise by 1.4 Bcf/d in 2025, while demand for natural gas, including domestic consumption and exports, rises by 3.2 Bcf/d.

Exports are the leading source of natural gas demand growth in the forecast.

“We expect exports of natural gas by pipeline and as liquefied natural gas (LNG) to increase by 2.9 Bcf/d in 2025, with most of the increase coming from LNG exports.”

EIA also forecasts consumption in the residential and commercial sectors to increase in 2025 because it expects colder weather than in 2024.

“However, we forecast a decrease in consumption in the electric power sector this year as natural gas prices rise and more renewables and coal are used to generate electricity, displacing some natural gas-fired generation capacity.”

EIA estimates that the United States began 2025 with 6% more natural gas in storage than the previous five-year average.

With demand growth outpacing supply growth this year, “we expect inventories will be drawn down to 4% below the five-year average by the end of 2025. As the storage surplus of the last two years diminishes, we expect some upward pressure on prices.”

In 2026, EIA forecasts natural gas supply will grow by about the same amount as demand.

We expect storage inventories will remain close to or below the five-year average much the year, leading to additional price increases in 2026.”

It forecasts demand for natural gas will again be driven mostly by growth in LNG exports as additional LNG export capacity from Golden Pass comes online in the middle of the year. LNG exports grow by 2.1 Bcf/d in 2026 to reach an average of 16.2 Bcf/d. Additional demand growth in 2026 comes from pipeline exports, while consumption of natural gas in the residential, commercial, and electric power sectors all decline slightly. Supply growth in 2026 is driven by an increase in dry natural gas production of 2.7 Bcf/d.

Natural gas prices

In the forecast, the annual U.S. benchmark Henry Hub spot price averages $3.10 per million British thermal units in 2025 and rises to almost $4.00/MMBtu in 2026.

EIA’s expectation that natural gas inventories remain at or below previous five-year averages during the forecast period puts upward pressure on natural gas prices.

The monthly Henry Hub spot price in the forecast remains between $2.50/MMBtu and $3.90/MMBtu in 2025 and between $3.50/MMBtu and $4.40/MMBtu in 2026 as LNG exports increase.

"Although we expect the Henry Hub price to rise from their all-time lows in 2024 over the forecast period, the potential exists for prices to increase by less than we forecast, particularly if the ramp-up of new LNG production is slower than expected or the start-up of the Golden Pass facility is delayed. Additionally, weather continues to present a significant risk to our Henry Hub price forecast, particularly in the winter months."

The $10 billion Golden Pass export project will add natural gas liquefaction and export capabilities to the existing terminal in Sabine Pass, Texas.

 

 

 

 

 

 

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