In the first half of this year, US power developers increased their power generation growth to the highest level in 21 years, indicating a significant increase in electricity demand brought about by artificial intelligence and data centers.
On Monday local time, the US Energy Information Administration (EIA) released a report showing that from January to June this year, US electricity generation increased by 20.2 GW (kilowatts), the highest increase since the same period in 2003. The newly added power generation in the first half of this year is 21% higher than the same period in 2023.
Growth rate of power generation in the first half of this year and planned growth rate in the second half of the year
According to an EIA survey, power developers also expect a year-on-year increase of 42.6 GW in US electricity generation in the second half of this year.
Solar energy remains the main growth driver
The surge in power demand in data centers and the push for electrification have increased the demand for electricity generation. EIA expects that most of the new electricity supply in the United States will come from carbon free energy sources, including solar energy and battery storage.
As in 2023, solar energy will account for the largest share of newly added power generation capacity in the United States in the first half of 2024. In the first half of this year, the total newly added solar capacity was 12GW, accounting for 59% of all newly added capacity. Texas and Florida account for 38% of the newly added solar capacity in the United States.
The second largest new capacity added so far this year is battery energy storage, accounting for 21% (4.2GW) of all new capacity added. The newly added battery energy storage is mainly concentrated in four states: California (37% of the total in the United States), Texas (24%), Arizona (19%), and Nevada (13%).
In the second half of this year, US power generators plan to increase their power generation capacity by 42.6GW, with nearly 60% of the planned capacity coming from solar energy (25GW), followed by battery storage (10.8GW) and wind energy (4.6GW).
This means that this year alone, the increase in power generation brought by new solar projects will reach 37GW, which will be the highest record in history.
The retirement speed of traditional gas-fired power generation is slowing down
But it cannot be denied that with the continuous growth of energy demand, the retirement speed of coal-fired and gas-fired power plants has indeed slowed down. EIA stated that compared to the same period last year, the retirement rate of power generation capacity for operators in the first half of 2024 decreased by 45%.
Retired power generation capacity in the first half of this year and planned retired capacity in the second half of the year
In the first half of this year, operators retired a total of 5.1 GW of power generation capacity, compared to 9.2 GW in the same period last year. Of the retired capacity in the first half of this year, 53% used natural gas as fuel, followed by coal at 41%.
In the second half of this year, about 2.4GW of power generation capacity is planned to be retired, including 0.7GW of coal and 1.1GW of natural gas.
