The expiring U.S. production tax credit is expected to drive a record 18.5 gigawatts of wind capacity to come online by the end of 2020, according to the Energy Information Administration in its inventory of electric generators. The additions would beat the record for capacity additions set in 2012, when 13.2 GW of wind was added to the grid.
EIA also anticipates record additions for solar photovoltaics, with 13.5 GW in large-scale capacity and another 5.1 GW in distributed solar PV capacity coming online in 2020. The previous record for solar additions was 8 GW, which were added in 2016. Natural gas will account for about 22% of added capacity, or about 9.3 GW.
Texas will add the biggest share of both the wind and solar additions.
A total of 11 GW of planned retirements in 2020 include 5.77 GW of coal, 3.74 GW of natural gas, and 1.62 GW of nuclear.
Slight decline in generation, sales
In its latest short-term energy outlook, released January 14, which is the first to include predictions for 2021, the EIA forecasts a slight decline in electricity generation and retail sales. Total generation is expected to be 4,078 billion kilowatt-hours in 2021, down from 4,121 billion kwh in 2019.
With anticipated retirements, the outlook expects generation from coal and nuclear sources to decline in 2020 and 2021. According to the data, EIA expects coal generation to be about 15% less in 2021 than it was in 2019 – dropping to about 815 billion kwh. That amount would be less than half of the generation from coal from 2011. EIA expects a slight increase in natural gas generation in 2020, and then a decline in 2021 to below 2019 levels.
Accounting for the record capacity additions, wind and solar are expected to see the biggest uptick, with solar generation expected to increase more than 70% - up to 122.76 billion kwh, up from 71.38 billion kwh in 2019. Wind generation is forecast to increase to almost 394 billion kwh, up from 300.84 billion kwh in 2019. These increases are the major components of increasing the share of renewable generation in the U.S. to 22% by 2021, up from 17% in 2019. The shift in generation to these sources is expected to decrease energy-related carbon dioxide emissions by 2% in 2020 and 1.5% in 2021.
The outlook forecasts that retail sales will decrease by about 23 billion kWh from 2019 to 2021, which is a decline of about one half of one percent. The outlook also predicts a jump in retail prices from 2020 to 2021, with the forecast expecting retail rates to increase across all customer classes. In the residential sector, the forecast is that average rates will go up to 13.32 cents/kwh (up from 13.01 cents/kwh in 2019). The forecast predicts more modest increases in the commercial and industrial sectors, with rates increasing to 10.77 cents/kwh and 7.00 cents/kwh, respectively.
In the markets, EIA forecasts that wholesale electricity prices in most of the regional transmission organization-operated markets will slightly decrease from 2019 to 2021, except for increases in PJM and SPP.