The United States generates electricity from many energy sources, attributing to different electricity rates. Some of the major categories of energy sources for electricity generation include fossil fuels (natural gas and coal), renewable energy, and nuclear energy.
Most power plants in the United States generate electricity with steam turbines that use nuclear, fossil fuels, biomass, solar-thermal, and geothermal energy. However, some power plants use gas turbines, wind turbines, and hydro turbines for power generation.
In this article, we explore the trends in the power and energy generation industry of the United States in 2018 and 2019, and what to expect in 2020. You will also get to understand the electricity rates for each power and energy source in the country.
Generation of Electricity Using Fossil Fuels
Fossil fuels were the largest energy sources for electricity generation in the U.S. In 2018, both coal and natural gas generated 63 percent of electricity in the United States. They will collectively generate 61 percent in 2020, according to the EIA.
Electricity Generation Using Natural Gas
Natural gas is used to fuel turbines that generate electricity. For the last two years, natural gas has dominated the United States electricity generation market, with about 35 percent in 2018 and 37 percent in 2019. EIA forecast that it will rise to 38 percent in 2020.
One of the factors that have contributed to the increased usage of natural gas in electricity generation is its low cost. In 2018, the price of natural gas supplied to power plants in the United States was $3.54 per million British thermal units (Btu) on average.
In 2019, the natural gas prices for electricity-generating companies averaged $2.85 per million Btu. According to the U.S. Energy Administration Information (EIA), the average cost of natural gas for power plants will reduce to $2.62 per million Btu in 2020.
EIA expects the average amount of natural gas-generated power to increase to 4.40 billion kWh per day in 2020. In 2018 and 2019, the amount of electricity generated using natural gas averaged 4.02 billion kWh per day and 4.29 kWh per day, respectively.
Power Generation Using Coal
Coal-fueled power plants dominated the electricity market in the past few decades until the year 2016, when natural gas-fueled power plants surpassed them. Since then, natural gas has been the leading energy source of electricity, with coal coming second.
Coal has been the second-largest source of energy for power generation for the last two years. Power plants that rely on coal produced 27 percent of the total electricity in the United States in 2018. However, it reduced to 25 percent in 2019, according to EIA.
In 2018, the average amount of electricity generated using coal was 3.14 billion kWh per day, while in 2019, it was 2.74 billion kWh per day. However, we expect the consumption to decline to 2.37 billion kWh per day in 2020 due to closure of some coal power plants.
Coal is the cheapest when in terms of power generation costs, compared to other energy sources. According to a report by EIA, the prices of coal per million Btu averaged $2.06 in 2018 and $2.07 in 2019. EIA forecasts the cost to rise to $2.10 per million Btu in 2020.
Renewable Energy Sources for Electricity Generation
Many renewable sources of energy generate electricity in the United States, including hydro, wind, and solar energy. According to the U.S. Energy Administration Information (EIA), renewable energy sources contribute about 20 percent of the country’s electricity.
EIA reports that non-hydroelectric renewable sources like wind and solar will grow fastest in the United States compared to other renewable sources. The total electricity generation by all non-hydroelectric sources will increase from 10 percent to 13 percent in 2020.
EIA forecasts that the United States’ power generation from renewable energy sources like wind and solar (except hydropower) will increase from 408 kWh in 2019 to 466 billion kWh in 2020. Conventional hydropower generation continues to drop with time.
Hydroelectric power plants utilize flowing water that spins turbines connected to generators to produce electricity. In 2018, hydropower plants generated 7 percent of the total United States electricity generation and 41 percent of the power generated using renewable sources.
Hydroelectric power generation has generally declined in the last two years. The average hydropower generation was 0.796 billion kWh per day in 2018 and 0.765 billion kWh per day in 2019. EIA forecasts that it will still drop to 0.755 billion kWh per day in 2020.
In general, the United States consumed 2.66 quadrillion Btu of conventional hydropower in 2018 and 2.552 quadrillion Btu in 2019. According to the EIA, the general consumption will reduce slightly to 2.545 quadrillion Btu in 2020.
Wind power plants use the wind to spin turbines that generate electricity. In 2018, wind energy contributed 7 percent of the total United States’ electricity and nearly 39 percent of the total energy from renewables. EIA expects wind-generated power to rise in 2020.
Wind electricity generation and consumption in the U.S. has increased over time. The total use of wind-generated power was 2.530 quadrillion Btu in 2018 and 2.706 quadrillion Btu in 2019. EIA predicts the amount to rise to 3.709 quadrillion Btu in 2020.
Solar electricity generation uses solar-thermal power and photovoltaic (PV) technologies. PV technology directly converts sunlight into electricity in photovoltaic cells, while most solar-thermal systems generate electricity using steam turbines.
In 2018, solar energy generated about two percent of total electricity in the United States, with a total consumption of 0.942 quadrillion kWh during that year. Electricity generation from solar energy sources increased to 1.055 quadrillion kWh in 2019.
Solar energy is the third-largest renewable source in the U.S. According to Energy Information Administration, solar energy sources will generate more electricity in 2020. The total solar-electricity consumption will also increase to 1.297 quadrillion kWh in 2020.
Steam-electric power plants can burn biomass directly to generate electricity or convert it into gas that they can burn in gas turbines or steam generators. Biomass contributed two percent of the total U.S. electricity in 2018. EIA expects the value to decrease in 2020.
Geothermal power plants generate less than one percent of the U.S. electricity. The total geothermal energy consumption was 0.216 quadrillion kWh in 2018 and 0.215 quadrillion kWh in 2019. EIA expects to use to reduce to 0.0212 quadrillion kWh in 2020.
Cost of Electricity in the United States
The average electricity rate in the United States was 13.30 cents per kWh as of November 2019. However, there is a variation of electric rates by state and consumer types. Power consumers fall into three main categories, namely residential, commercial, and industrial.
Residential Electricity Rates
The average residential electric rate in the U.S. has been increasing steadily for the last two years. The retail prices were 12.89 cents per kWh in 2018 and 12.99 cents per kWh in 2019. EIA predicts that the average costs will rise to 13.11 cents per kWh in 2020.
Commercial Electricity Rates
The average commercial electricity rate in the United States was 10.66 cents per kWh in 2018 and 10.62 cents per kWh in 2019. According to EIA, the prices will reduce slightly to 10.61 cents per kWh in 2020.
Industrial Electricity Rates
Industries pay the lowest electric rates in the United States. The average rate was 6.93 cents per kWh in 2018 and 6.80 cents per kWh in 2019. In 2020, the prices will rise again to 6.83 cents per kWh on average, as EIA reports.
Compare Electricity Rates to Find the Lowest Electric Rates
Electricity prices in the U.S. can be costly, necessitating the need to compare electric rates to find the best deals. This energy rate comparison website can help you compare electric prices of different electricity companies in the United States.
You can also reduce your energy consumption by adopting reliable energy-saving tips. It will not only help you save money but also conserve the environment. Finally, as you compare electric company rates, select a power supplier with not only the best electricity rates but also favorable terms of service.