As fossil fuel generation leveled off, the United States embraced renewable energy, bringing 162 gigawatts of solar and 150 gigawatts of wind online. At the same time, the economic power of the United States is skyrocketing: in 2003, the gross domestic product of the United States was $15.5 trillion ($11.4 trillion in real terms), and by 2023, it will be more than $26 trillion, with an inflation-adjusted growth rate of more than 67%.
In the same period, national electricity consumption also increased by about 10%. The once-nascent wind and solar industries are now growing at an annual rate that far exceeds any foreseeable increase in U.S. electricity consumption.
This shift has left fossil fuel power plants underutilized and operating at reduced capacity, especially those that have come on stream in the last two decades. Natural gas peaking plants make up many new fossil fuel power plants, with annual capacity utilization rates ranging from 5 percent to 15 percent.
Analysts at Rhodium Group, a data analysis firm, report that annual emissions from the U.S. power sector have decreased by 40 percent over a similar period, from about 2.5 billion tons to 1.5 billion tons. This decline has occurred at a time when nuclear and hydropower production has declined, coal has been replaced by natural gas, and wind and solar have grown.
Looking ahead, these patterns are expected to continue: more fossil energy is decommissioned rather than built, while a significant amount of renewable energy will take its place.
It is expected that in 2024, the retirement and introduction of fossil fuel power plants will cancel each other out, with each contributing less than 5 gigawatts of generating capacity. However, a shift is expected in 2025, when 15 gigawatts of fossil fuel power plants, mostly coal, will be retired, while only 5 gigawatts of new natural gas power plants will come onstream.
In stark contrast to fossil energy decommissioning, the United States is expected to install more than 100 gigawatts of new solar capacity in 2024 and 2025, bringing solar capacity to more than a quarter of a megawatt. In addition, EIA expects 15 gigawatts of batteries to be installed in 2024, with additional batteries to be installed in subsequent years.
While battery storage does not generate electricity, it plays a crucial role in optimizing energy use by storing power during low demand and releasing it during peak demand. These soon-to-be-installed battery devices are specifically designed to target high-cost electricity needed during peak demand periods in areas traditionally served by gas-fired peaking plants with generating capacity of only 5 to 15 percent.