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EIA forecasts lower energy-produced CO2 emissions for 2019, 2020

In its latest forecast, the U.S. Energy Information Administration expects that energy-related carbon dioxide emissions will continue to decrease in 2019 and 2020 as a result of cooler weather and an ongoing shift towards cleaner energy fuels.

"EIA expects the fuel mix for the U.S. power sector to continue to shift in 2019 and 2020," EIA Administrator Linda Capuano remarked on the release of the agency's "Short-Term Energy Outlook" for September. In a slight adjustment from its previous forecast from August, the EIA expects that natural gas-fired generation will increase its share of the utility-scale U.S. electricity mix from an average of 34% in 2018 to 37% in 2019 and 38% in 2020. In contrast, coal's share of the generation mix will continue to decrease from 28% in 2018 to 25% in 2019 and 22% in 2020.

Like natural gas, Capuano said utility-scale renewables, such as wind and solar, will make gradual gains in the coming two years, with the EIA forecasting their collective share of nonhydropower renewables' generation mix increasing from 10% in 2018 and 2019 to 12% in 2020. Nuclear power's share will remain steady at about 20% in 2019 and 2020. Likewise, hydropower is expected to average at 7% for 2019 and 2020, as it had in 2018.

"Increased share of less carbon-intensive fuels in the U.S. power sector contributes significantly to decreases in EIA's September forecast for energy-related carbon emissions in 2019 and 2020," Capuano observed. After rising by 2.7% in 2018 "because of a hotter-than average summer and colder-than-average winter," the EIA chief said U.S. CO2 emissions are expected to fall 2.5% in 2019 and 1.0% in 2020. As a contributing factor, the EIA expects that space cooling demand — as measured in cooling degree days — will also be lower than in 2018, when it was 13% higher than the previous 10-year average.

Regarding power markets, the EIA forecasts that wholesale electricity prices in 2019 will generally be lower than in 2018 as a result of lower natural gas fuel costs. For instance, the average cost of natural gas delivered to U.S. power generators in the first half of 2019 was 9% lower than the same period in 2018, the agency said.

Going forward, the EIA expects the delivered cost of natural gas during the second half of 2019 to be 31% lower than last year. While wholesale electricity prices in the southeast are forecasted to be less than 1% lower than 2018, the EIA expects wholesale electricity prices in New England will be 28% lower.

Regarding retail sales, the EIA forecasts retail electricity prices for commercial customers will decline from 10.66 cents/kWh in 2018 to 10.63 cents/kWh in 2019 and 10.62 cents/kWh in 2020. It expects prices for industrial customers will decline from 6.93 cents/kWh in 2018 to 6.81 cents/kWh in 2019 before rising back to 6.87 cents/kWh in 2020.

However, the EIA predicts that retail electricity prices for residential consumers will increase from an average of 12.89 cents/kWh in 2018 to 13.04 cents/kWh in 2019 and then 13.13 cents/kWh in 2020.