The U.S. Energy Information Administration (EIA) expects that the United States will generate more electricity from renewables and coal in the second half of this year, as electricity demand and natural gas prices increase. According to the latest July Short-Term Energy Outlook (STEO) from the EIA, updated forecasts show that natural gas prices will be approximately 36 percent higher in the second half of the year than in the first half of the year.

As a result, the agency expects a decrease in electricity generation from natural gas, the largest fuel source for U.S. electricity. Demand is forecast to be 2 percent higher in the second half of 2024 compared to 2023, forcing a higher demand for power. 

“The increase in electricity demand paired with a decrease in natural gas generation creates a gap between the power we need and the power being produced,” said EIA administrator Joe DeCarolis. 

The agency expects an increase in solar electricity generation by as much as 42 percent in the second half of the year. Wind generation is expected to increase by 6 percent, while hydropower and coal are expected to rise by 3 percent each. 

The increases in alternative fuel source demand stems from a hotter-than-normal start to the year, the agency reports. This contributed to about 5 percent more U.S. electricity generation in the first half of 2024 than during the same period in 2023, as air-conditioning use increased in response to higher temperatures. 

A further 2 percent increase in electricity generation is expected in the commercial sector due to a rise in demand from data centers. 

DeCarolis said, “Utilities will look for a more economical alternative as natural gas prices go up. Since so much renewable capacity has been coming online in the last couple of years, we expect renewables, especially solar, to fill most of the gap in the power mix. We expect utilities will also look to coal as a less expensive fuel source the rest of the year.”