EIA forecasts U.S. retail sales of electricity will increase by 2.8% in 2021, led by a 5.1% increase in sales to the industrial sector. In the most recent release of our Short-Term Energy Outlook (STEO), we forecast electricity sales will also grow in the commercial sector, though at a slower rate of 2.1%, as many workers continue working from home.

“The increase in electricity sales to the industrial sector is a strong sign of rising levels of economic output as the COVID-19 pandemic recedes in the United States,” said EIA Acting Administrator Steve Nalley.

Renewable energy should contribute a greater share of U.S. electricity generation through 2022, reaching a 23% share, up from 20% in 2020. About 50 gigawatts of solar and wind capacity is scheduled to come online in the United States during the next 18 months, with 2022 as the first year that growth in utility solar capacity will outpace wind capacity growth.

We forecast an 11% decrease in electricity generation from hydropower in California and the Northwest in 2021 because of weather conditions and a 12% decrease nationwide.

“The extreme drought in the Northwest and California is straining water reserves, which we expect to cause a significant decrease in electricity from hydropower this year,” Nalley said.

Also in the STEO:

  • Global consumption of petroleum and liquid fuels will increase by about 9 million barrels per day (b/d) from 2020 to 2022, and we expect consumption next year to surpass 2019 levels. We estimate U.S. consumption of liquid fuels will surpass 2019 levels in 2022. “Petroleum demand increases are driven by global economic growth, reopening economies, and a return to travel patterns more similar to pre-pandemic norms,” Nalley said. 
  • U.S. gasoline prices averaged $3.06 per gallon (gal) in June—the first time U.S. gasoline prices averaged above $3.00/gal since October 2014. We expect regular-grade gasoline prices to average $2.92/gal in the rest of this year and $2.74/gal for all of 2022. “We expect that petroleum production will increase through 2022, which will help moderate the rising prices we’ve seen in the United States and globally,” Nalley said.
  • We estimate that liquefied natural gas (LNG) exports will increase while production will stay mostly level this year, leading to natural gas inventories of 3.6 trillion cubic feet in October—3% below the five-year average. “U.S. LNG exports reached a record high in the spring, and we see that trend continuing as global demand LNG regasification capacity increase,” Nalley said.