Electricity, coal, and renewables
Electricity consumption
Weather is one of the primary drivers affecting year-to-year changes in electricity consumption. For the upcoming winter (November–March), we expect U.S. electricity sales to all end users will total about 1,580 billion kilowatthours (BkWh), 2% more than the previous winter, driven by space heating demand as a result of an expected 6% increase in winter heating degree days.
The residential sector is responsible for the most consumption of electricity in the United States, and our expectation of colder temperatures this winter leads us to a forecast 3% (17 BkWh) increase in consumption compared with last winter. Forecast winter electricity sales in the U.S. commercial sector grow by 2% (10 BkWh) due to the colder weather and continued growth in power demand from data centers. U.S. industrial electricity sales this winter grow by 2% (9 BkWh).
Retail electricity prices
We expect U.S. residential sector retail electricity prices will average 16 cents per kilowatthour (kWh) this winter, which would be about the same as the average residential price last winter. Over the past three winters, nominal year-over-year increases in residential electricity prices averaged 7%. The relatively flat growth in forecast electricity prices this winter reflects 2% lower costs of natural gas for power generation compared to last winter and increased levels of low-cost renewable generation.
Coal markets
We expect coal consumption to remain steady in the United States during 2025, increasing by 1% to 409 million short tons (MMst) from 2024 after falling by 5% between 2023 and 2024. The 2025 increase in consumption is primarily the result of our forecast 1% increase in electric power consumption next year. In the United States, the electric power sector consumes approximately 90% of the coal consumed domestically. Steady consumption in 2025 is a result of higher natural gas prices and increased electricity demand. It also follows a slowdown in coal plant retirements in 2024, when utilities retired 3 gigawatts (GW) of coal-fired generation compared with 11 GW in 2023.
Despite relatively flat U.S. coal consumption next year, we expect coal production will fall more sharply as coal-fired power plants reduce their inventories. We forecast that coal production will fall to 472 MMst in 2025, down by 7% from 2024. Moreover, we expect retirements of coal-fired generating capacity to increase again to 11 GW in 2025, while 9 GW of wind generation capacity and 25 GW of solar generation capacity come online. The combination of a modest increase in consumption from operating coal plants and a decline in coal production will reduce coal inventories held by power plants from 131 MMst at the end of this year to 100 MMst by the end of 2025.