Electricity, Coal, and Renewables
Electricity generation
We estimate that total electricity generation by the U.S. electric power sector will reach a record of almost 4,390 billion kilowatthours (BkWh) in 2026, up 2.7% from the previous record set last year. Rising electricity generation is driven by growing demand from the commercial sector and hot temperatures this past summer. We forecast that U.S. electricity generation will grow at a slightly slower rate of 1.2% in 2027 as continued increases in commercial and industrial sector electricity demand are offset somewhat by lower residential electricity demand resulting from forecast milder summer weather next year.
Rising U.S. electricity generation is met primarily by increasing generation from renewable energy sources. We expect the share of total U.S. generation supplied by utility-scale solar plants will rise from 7% in 2025 to 8% in 2026 and nearly 10% in 2027. The forecast share of generation from wind rises from 11% in 2025 to 12% by 2027. Solar and wind generation are rising as a result of an expected 72 gigawatts and 20 gigawatts, respectively, of new capacity coming online this year and next.
Generation from other energy sources is likely to remain relatively flat or decrease. We forecast the U.S. natural gas generation share to average close to 40% in 2026 and 2027, and the nuclear generation share averages 18%. We forecast the share of total U.S. generation from coal-fired power plants to decline from 17% in 2025 to 15% by 2027 as 13 GW of capacity is scheduled to retire by the end of 2027. Although the share of generation from those fuels is falling, total generation from those fuels is relatively flat in the forecast, remaining in line with the combined generation from 2025.
Coal markets
We forecast coal consumption will total 419 million short tons in 2026, a 7% decrease from 2025. Electric power coal consumption, which accounts for approximately 90% of domestic coal consumption, has declined from last year in 8 of the 10 months so far in 2026. The decreases have been driven by significant increases in wind and solar capacity as well as a 9% decline in the average natural gas price in the electric power sector during the second and third quarters of this year. We expect coal consumption to decline an additional 5% in 2027, driven by a 19% decrease in natural gas prices for electric generating plants and further increases in wind and solar capacity.
The drop in coal consumption is leading to a drop in coal production. We expect coal production to decrease by 2% in 2026. Production falls by less than domestic consumption as part of the drop in domestic consumption is offset by an 11% increase in coal exports compared with 2025. In 2027, we expect coal production to fall 4% as exports remain flat and domestic consumption falls. Exports capture a larger share of U.S. coal disposition compared with 2025 after international thermal coal prices rose in the first half of 2026 due to stronger demand in European and Asian markets and due to China’s commitment to purchase 10 million metric tons of U.S. coal in 2027 and 2028.
