On May 12, the U.S. Energy Information Administration released its latest Short-Term Energy Outlook that includes an analysis of the impact of the COVID-19 pandemic on the energy sector. Among the findings--
-- Electric Power Decline: Total U.S. electric power sector generation will decline by 5 percent in 2020, most of the expected decline is reflected in lower fossil fuel generation.
-- Coal generation will fall by 25 percent in 2020 and demand for coal will decrease by 23 percent driven by low natural gas prices and reduced power consumption.
-- Natural gas generation is relatively flat this year, reflecting favorable fuel costs and the addition of new generating capacity.
-- Renewable energy sources will account for the largest portion of new generating capacity in 2020, driving EIA’s forecast of 11 percent growth in renewable generation by the electric power sector. Renewable energy is typically dispatched whenever it is available because of its low operating cost.
-- Renewables Fastest Growing: Although EIA expects renewable energy to be the fastest-growing source of electricity generation in 2020, the effects of the economic slowdown related to COVID- 19 are likely to affect new generating capacity builds during the next few months.
EIA expects the electric power sector will add 20.4 gigawatts of new wind capacity and 12.7 gigawatts of utility-scale solar capacity in 2020. However, these forecasts are subject to a high degree of uncertainty, and EIA will continue to monitor reported planned capacity builds.
-- Carbon Dioxide Emissions: After decreasing by 2.8 percent in 2019, EIA forecasts that U.S. energy-related carbon dioxide (CO2) emissions will decrease by 11 percent (572 million metric tons) in 2020.
This record decline is the result of restrictions on business and travel activity and slowing economic growth related to COVID-19. CO2 emissions decline from all fossil fuels, particularly coal (23 percent) and petroleum (11 percent).
In 2021, EIA forecasts that energy- related CO2 emissions will increase by 5 percent as the economy recovers and stay-at- home orders are lifted. Energy-related CO2 emissions are sensitive to changes in weather, economic growth, energy prices, and fuel mix.
-- Liquid Fuels: EIA forecasts significant decreases in U.S. liquid fuels demand during the first half of 2020 as a result of COVID-19 travel restrictions and disruptions to business and economic activity. EIA expects the largest impacts will occur in the second quarter of 2020 before gradually dissipating over the next 18 months.
EIA expects U.S. motor gasoline consumption to fall from 8.6 million b/d in the first quarter of 2020 to an average of 7.0 million b/d in the second quarter before gradually increasing to 8.7 million b/d in the second half of the year.
For all of 2020, EIA forecasts that U.S. motor gasoline consumption will average 8.3 million b/d, a decrease of 11 percent compared with 2019.
Click Here for a summary of the EIA Short-Term Energy Outlook.
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