The July Energy Information Administration (EIA) short-term energy outlook predicts a rise in both energy demand and costs for the latter half of 2024. The report highlights that overall electricity consumption is anticipated to grow by 2% compared to the previous year. Concurrently, natural gas prices are projected to surge by approximately 36% in the latter half of the year relative to the first half.
In response to these higher natural gas prices, the EIA expects a significant increase in electricity generation from solar power, forecasting a 42% rise in solar-generated electricity during the same period. EIA Administrator Joe DeCarolis noted, “The increase in electricity demand, coupled with a decrease in natural gas generation, creates a gap between the power needed and the power produced. Utilities are likely to seek more economical alternatives as natural gas prices rise. Given the substantial growth in renewable energy capacity in recent years, particularly solar, we anticipate that renewables will bridge most of this gap. Additionally, utilities may turn to coal as a more cost-effective fuel source for the remainder of the year.”
The report also anticipates a rise in Brent crude oil prices, projecting an increase to $89 per barrel in the latter half of 2024, with an average of $91 per barrel expected in the first quarter of 2025. This marks an increase from the $84 per barrel average observed in the first half of 2024.
Severe weather conditions, including Hurricane Beryl, which made landfall on the Texas Gulf Coast on July 8, could impact these forecasts. The EIA indicated that it will continue to assess the hurricane’s effects on critical infrastructure in this key energy region and provide updates in future reports.
Additionally, diesel prices are projected to rise, with the national average expected to reach $3.84 per gallon in the third quarter of 2024, climbing to $3.90 per gallon by year-end.
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