Solar Energy Growth and Natural Gas Decline: EIA’s Latest Power Generation Forecast
On February 13, 2025, the U.S. Energy Information Administration (EIA) released its latest power generation forecast, revealing significant trends in the energy sector. According to the report, the proportion of utility-scale solar energy in the U.S. power generation mix is expected to rise from 5% in 2024 to 7% in 2025 and further to 8% in 2026. This indicates a remarkable 45% increase in U.S. solar generating capacity from 2024 to 2026.
In contrast, the share of natural gas-fired electricity generation is projected to decrease from 43% in 2024 to 40% in 2025, ultimately dropping to 39% in 2026. Wind energy is expected to remain stable at 11% in 2025, with a slight increase to 12% in 2026.
Coal, which accounted for 16% of U.S. electricity generation in 2024, is anticipated to maintain a relatively steady share. However, a surge in coal consumption was noted in January 2025, particularly in the Midcontinent and Mid-Atlantic regions where coal is a significant power source. The EIA reported a 7% increase in coal consumption in the U.S. electric power sector in January 2025 compared to January 2024. Consequently, the agency has raised its coal consumption forecast for 2025 to 386 million short tons (MMst), marking a 4% increase from 2024.
The EIA attributes the rise in coal consumption to expectations of increased U.S. power generation and higher average natural gas prices in 2025 compared to 2024. Furthermore, the EIA forecasts that U.S. energy-related CO2 emissions will rise by 1% in 2025 but will return to near 2024 levels by 2026.
In 2024, electricity generation from the U.S. electric power sector increased by 3%. This growth is driven by rising electricity demand from data centers, electrification efforts, and manufacturing activities. The EIA anticipates that U.S. power plants will generate approximately 4,240 billion kilowatt-hours (kWh) of electricity in 2025, reflecting a 2% growth from 2024, with an additional 1% growth expected in 2026. If electricity generation continues to grow over the next two years, it will mark the first three consecutive years of growth since the period of 2005-2007.
As the energy landscape evolves, these projections highlight the shifting dynamics within the U.S. power generation sector, with solar energy taking a more prominent role and natural gas’s share declining.
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