The U.S. Energy Information Administration (EIA) has released its Annual Energy Outlook 2020, and key takeaways are that U.S. energy consumption grows more slowly than gross domestic production throughout the projection period (2050), with renewables being the fastest-growing source of electricity generation through 2050.
Key takeaways in more detail are:
- U.S. energy consumption grows more slowly than GDP as U.S. energy efficiency continues to increase. This decline in the energy intensity of the U.S. economy continues through 2050.
- The electricity generation mix continues to experience a rapid rate of change, with renewables the fastest-growing source of electricity generation through 2050 because of continuing declines in the capital costs for solar and wind that are supported by federal tax credits and higher state-level renewables targets. With slow load growth and increasing electricity production from renewables, U.S. coal-fired and nuclear electricity generation declines. Most of the decline occurs by the mid-2020s.
- The U.S. continues to produce historically high levels of crude oil and natural gas. Slow growth in domestic consumption of these fuels leads to increasing exports of crude oil, petroleum products and liquefied natural gas.
- After falling during the first half of the projection period, total U.S. energy-related carbon dioxide emissions resume modest growth in the 2030s, driven largely by increases in energy demand in the transportation and industrial sectors. However, by 2050, they remain 4% lower than 2019 levels.
The outlook explores long-term energy trends in the U.S.
The projections in the AEO2020 are not predictions of what will happen. Rather, they are modeled projections of what may happen given certain assumptions and methodologies. By varying those assumptions and methodologies, AEO2020 can illustrate important factors in future energy production and use in the U.S.
Energy market projections are subject to much uncertainty because many of the events that shape energy markets—as well as future developments in technologies, demographics and resources—cannot be foreseen with certainty. AEO2020 includes a Reference case and side cases that systematically vary important underlying assumptions.
EIA develops the AEO with the National Energy Modeling System (NEMS), an integrated model that captures interactions of economic changes and energy supply, demand, and prices.
EIA based the economic and demographic trends reflected in the Reference case on the current views of leading economic forecasters and demographers. For example, the Reference case projection assumes improvement in known energy production, delivery and consumption technologies. The Reference case generally assumes that current laws and regulations that affect the energy sector, including laws that have end dates, are unchanged throughout the projection period. This assumption makes it possible to use the Reference case as a benchmark to compare policy-based modeling.
Specific to hydropower, the report indicates energy production by this technology will remain relatively flat through 2050. Of all renewable electricity production under the AEO2020 Reference case, hydroelectric power is expected to contribute 14% by 2050, compared with 37% in 2020. This change in percentage is attributed primarily to a significant growth in solar generation (from 15% in 2020 to 46% in 2050).
EIA is the statistical and analytical agency within the U.S. Department of Energy.