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Hydropower became a bigger part of the US energy mix in 2017
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Fossil fuels muscled out of US power generation mix by renewables

While wind and hydropower are making inroads, coal and gas are retreating

Renewable sources of energy made a record contribution to US net electricity generation last year as the share of fossil fuels in the country's power sector continues its retreat.

The proportion of renewable energy, such as hydropower and solar PV, in the country's fuel basket mix rose to 17.1% last year, according to data released by the US Energy Information Administration. That's up from just 15% a year earlier.

Hydropower made up 7.5% of the total, wind power accounted for 6.3% while solar power comprised 1.3%. The remainder is comprised of biomass and geothermal power.

While the use of renewables in the power sector expanded, power generated from natural gas and coal slumped.

Coal-fired generation fell almost 8% year-on-year, down to 30.1%, according to EIA data. While gas' share in US power generation fell 2.5% year-on-year down to 31.7%.

Source: U.S. Energy Information Administration, Electric Power Monthly

Natural gas remained the most-used source of power generation last year, but consumption in the sector fell by 105bn kilowatt hours—the largest annual decline on record-down to 1.27 trillion kwh. The decline can be partly explained by slightly higher than usual natural gas prices, ‎EIA lead industry economist Owen Comstock told Petroleum Economist .

Henry Hub natural gas prices averaged $2.99/million British thermal units (m/Btu) in 2017, up from $2.52/m Btu in 2016, he noted. However, this is still relatively low given that the 2016 price was the lowest annual average in more than 15 years.

A total of 4GW of natural gas-fired capacity was retired last year.

Coal has seen a steeper decline than gas in the US power generation sector—contributing 1.21 trillion kWh last year, down from 2 trillion kWh in 2008.

Total US net electricity generation was down 1.5%, reflecting lower demand that the EIA attributes to milder weather. The US had a milder summer compared to 2016, as well as a few warmer winter months. These factors lowered electricity demand for electric space heating and air conditioning, so overall electricity generation fell.

The EIA's Comstock said that while other factors like changes in electricity prices and long-term energy efficiency trends also play a role in the fluctuating demand, that year-over-year changes are largely explained by weather differences.

Dry years ahead?

The EIA projects that wind will become the dominant source of renewable energy in the power generation mix by 2019, noting that nearly 6.3GW of wind power capacity was added in 2017—around a third of this addition came online in December alone.

The energy administration believes 2018 and 2019 will see less of the runoff that provides steady flows for US hydropower generation. Runoff is a combination of rainwater draining directly into waterways and accumulated snowpack in mountainous regions that is slowly released as temperatures rise in the spring and summer.

Using data from the National Oceanic and Atmospheric Administration and National Weather Service, the EIA has projected that overall generation from hydropower will be slightly lower, at 6.5% of total utility-scale generation in 2018 and 6.6% in 2019.

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