The U.S. Department of Energy’s Energy Information Administration (EIA) is a particularly rich source of information for those delving into the details of the transformation of the U.S. power system. And this data is showing that 2017 may be the first year where solar and wind arrive on the power system in a big way, digging into the market share of not just coal, but also natural gas.
The EIA’s Monthly Energy Review for December 2017 shows coal generation falling 1.5% in the first nine months of the year versus the first nine months of 2016. This is a continuation of the slide that coal has been on in the United States for the last decade, with the output of electricity from coal-fired plants falling 39% from its 2007 peak to 2016.
Much of the story for the first part of the 21st century has been the replacement of coal with natural gas, with electricity generation from gas more than doubling from 2000 through 2016 as hydraulic fracturing (fracking) transformed the gas industry. However, in the first nine months of 2017 gas use fell 11% year over-year. If borne out through the last three months this would be the first such fall since 2013.
Nuclear generation also declined 1.5%, despite remaining relatively steady over the last decade. Petroleum-fired generation continues to decline into obscurity and made up 0.5% of all generation over the nine-month period.
The biggest single factor in the decline of thermal generation in 2017 is a fall in demand. Total electricity generation fell by 2.6% in the first nine months of 2017, mirroring a 3% fall in total electric use. If borne out through the last three months of 2017 this will be the third straight year of falling output.
Some of this is due to warmer weather and less demand for heating. And as behind-the-meter solar is not included in generation statistics in this dataset, a minor portion of the fall in electricity use is likely due to demand offset by rooftop solar.
However, it is also evident that in the United States economic growth as measured by gross domestic product (GDP) is decoupling from electricity demand. In fact, annual U.S. electricity demand has not returned to its pre-recession peak in 2007, even as the economy recovered as measured in GDP and official unemployment figures.
But while the United States saw 80 terrawatt-hours (TWh) less electricity generation in the first nine months of 2017, it also saw 65 TWh more generation from renewable energy. As previously mentioned by pv magazine the biggest single contributor to this was additional hydro generation due to a wet winter on the West Coast, which added 31 TWh more than the first nine months of 2016.
However there was also an additional 14 TWh from utility-scale solar, representing a 51% growth in output over the first nine months of 2016, and an additional 19 TWh from wind. And so even with the decline in electric demand, it may be that 2017 will be remembered as the year when on a national scale solar and wind began to clearly dig into the market share of all forms of fossil fuel-fired generation.
The market implications for this are significant, in that conventional generation is now fighting to maintain its share of a shrinking pie, and the U.S. Department of Energy’s clumsy moves to find a rationale to bail out the coal and nuclear industries can be seen in this light.