Energy

The EIA's July Energy Report In Pictures


U.S. Primary Energy Consumption Breakdown

EIA

With Iran stirring up trouble in the world’s most important waterway for seaborne oil trade, now might be a good time to take a look at the energy profile of the largest oil consumer in the world – The United States of America.

Fortunately, the U.S. Energy Information Administration (EIA) just released its July report which offers some intriguing insights into the state of America’s energy landscape. For our readers who are also visual learners, here are some highlights in infographic form.

Currently, U.S. primary energy consumption, which means the consumption of all energy across all sectors in the country, is still dominated by fossil fuels. Oil and its refined products lead the pack. While the country has done an impressive job shrinking its petroleum imports and increasing domestic supply thanks to a boom in shale production, it still consumes some 21 million barrels per day (bpd) of petroleum. Compare this to number 2 China – a country of 1.4 billion – which consumes 13.5 million bpd.

Natural gas, the second most widely used form of energy in the U.S. after oil, dominates the power sector. At around 31 quadrillion Btu, natural gas accounted for around 31% of energy consumption in 2018 and holds 35% of electricity generation. That figure will reach 38% by the end of 2019.  This correlates with rising electricity consumption, increased supply, record-low natural gas prices, and climate-friendly policies which hurt gas’s primary competitor – coal.

U.S Power Generation Mix

EIA

Coal’s role in primary energy consumption will continue to decline as natural gas and renewables erode its market share in the power sector, and as legacy coal plants retire. Total U.S. coal consumption for 2019 will decline 14% from 2018 levels and is expected to drop by a further 4% in 2020. By next year, 10% of the coal-fired plant capacity operating in 2017 will be retired. Natural gas and renewables will fill this gap.

Paradoxically, despite all the concerns about decreasing CO2 emissions, nuclear power and hydropower contributions to electricity generation remain flat. Generally, both technologies are cost-competitive with alternatives, and maintenance and capacity upgrades like those implemented by market leaders such as Exelon are keeping pace with closures of aging/less economic plants. Yet, environmental concerns about the destruction of rivers and valleys, and a systemic crisis in the U.S. nuclear industry, are keeping a ceiling on growth in both sectors.

 

U.S. Renewables Energy Supply

EIA

 

Carbon-free sources of power generation are increasing in the U.S., but not as quickly as many believe. Renewables provided 17% of total electricity generation in 2018, and EIA expects their share to increase to 18% in 2019 and to 20% in 2020. The portion of total generation for non-hydro renewables, which was 10% in 2018, should increase to 11% in 2019 and to 13% in 2020.

 This is not exactly gangbuster sectoral growth. Market leaders in solar PV and wind turbine manufacturing like GE, Vestas, and Sunrun must contend with a booming natural gas market and low electricity prices. Renewable capacity generation does not just need to increase for shifts to take place in the power sector, it needs to increase faster than its fossil fuel competition. 

 Some 6 GW of utility-scale solar photovoltaic (PV) capacity will be added in the United States in 2019 and about 9 GW in 2020. Much of this new capacity is planned in the southeast United States including Texas, the Carolinas, and Florida where electricity generation meets demand in the peak summer months.

 As for wind, the EIA expects generating capacity to increase from 94 GW at the end of 2018 to almost 108 GW at the end of 2019 and to 118 GW by the end of 2020. Onshore wind can be cost-competitive with highly efficient advanced combined-cycle natural gas (CCNGs) plants in the right conditions on a dollar per kilowatt-hour basis when paired with the U.S. governments Production Tax Credit (PTC). As the industry manages the phase-out of the PTC subsidy, it will need to rely on tech innovation to boost efficiency and reduce costs for growth to continue.  

 All in all, the U.S. energy landscape is changing – but it is still one dominated by fossil fuels. America’s oil and gas giants like ExxonMobil, Chevron, and Philips 66 will continue to prosper well into the next decade, even as renewable energy continues down its path of steady market penetration.

With assistance from James Grant and Tahir Kazykhanov 

 



READ NEWS SOURCE

This website uses cookies. By continuing to use this site, you accept our use of cookies.