EIA Projects Modest Additions of New Electric Generation Capacity

July 17, 2014 By Karen Henry

electric-capacity-enegy-manageProjected future electric generation capacity additions are well below average annual levels, according to the US Energy Information Administration (EIA) Annual Energy Outlook 2014 (AEO2014) Reference case. Between 2013 and 2014, the United States will add 351 GW of new electric generating capacity in both the electric power sector and the end-use sector.

Natural gas is the primary fuel source of the projected added capacity, according to the EIA. Near-term additions (through 2016) average 16 GW per year, followed by additions of less than 9 GW per year through 2022, as the existing generating fleet will be sufficient to meet expected demand growth in most regions. From 2025 to 2040, annual additions increase to an average 14 GW per year, but remain below recent levels.

A boom in construction of new natural gas-fired plants began in 2000, largely driven by independent power producers in response to deregulation in the electric power sector. US electric generating capacity additions averaged 35 GW annually from 2000 through 2005. Almost all of the capacity added during those years was natural gas-fired and about two-thirds use efficient combined-cycle technology. From 2006 through 2012, annual average capacity additions dropped to 19 GW, with 42 percent of the additions representing renewable technologies and 45 percent representing natural gas-fired technologies. The renewable additions were primarily wind plants built to take advantage of federal tax incentives and to help meet state renewable portfolio standards. The high levels of recent capacity additions, combined with relatively low electricity demand, have resulted in surplus capacity relative to required reserve margins for many regions of the country.

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