The Energy Information Administration (EIA) just published its Short Term Energy Outlook — on the same day we quoted NEXTracker CEO Dan Shugar as saying, “EIA’s projections greatly underestimate the growth of solar and significantly overestimate coal’s persistence in the energy mix.”
Along with EIA’s warning that “there are no facts about the future,” here are six takeaways from the EIA bulletin — Covid-19 edition.
- EIA forecasts the electric power market to add 19.4 gigawatts of new wind capacity and 12.6 gigawatts of utility-scale solar capacity this year, down 5% and 10%, respectively, than previously forecasted. WoodMac analysts see a potential for a delay in up to 5 gigawatts of PV projects in 2020.
- EIA expects that coal generation will fall by 20% in 2020, while natural gas generation is expected to rise by 1% this year, reflecting favorable fuel costs and the addition of new generating capacity.
- EIA forecasts that U.S. coal production will total 537 million short tons (MMst) in 2020, down 153 MMst (22%) from 2019. Lower production reflects declining demand for coal in the electric power sector, lower demand for U.S. exports, and a number of coal mines that have been idled for extended periods as a result of Covid-19.
- EIA forecasts that total U.S. electric power sector generation will decline by 3% in 2020.
Global liquid fuels
- The Covid-19 pandemic has caused significant changes in energy fuel supply and demand patterns. Crude oil prices, in particular, have fallen significantly since the beginning of 2020, largely driven by the economic contraction caused by Covid-19 and a sudden increase in crude oil supply following the suspension of previously agreed upon production cuts among the OPEC and partner countries.
- In March, the Henry Hub natural gas spot price averaged $1.74 per million British thermal units. EIA forecasts that prices will begin to rise at the end of the second quarter of 2020 as U.S. natural gas production declines and natural gas use for power generation increases the demand for natural gas.