US Electricity - 2024

Investment Analysis Clubs Macro Economic Trends and Risks
1

(Minor corrections to some of the numbers in the percentage table…)

The Energy Information Administration recently published the US electricity generation data for December. We now have the full year information for 2024.

https://www.eia.gov/electricity/monthly/epm_table_grapher.php?t=table_1_01

Some general trends…
Overall electricity generation increased by 132 TWh over 2023, or a 3.1% increase. This includes the estimated generation from small scale (rooftop) solar installations.

Generation from coal decreased 22 TWh compared to 2023. (-3.3% change)
Generation from natural gas increased 59 TWh (+3.2%).
Non-Hydro large scale renewables increased 84 TWh (+13%).
Small scale solar increased 11 TWh (+15%).

Overall fossil fuels increased 34 TWh (+1.3%)

Renewables continue to grow, but power generation from natural gas also continues to grow. CO2 emissions from natural gas combustion are at an all-time high. Good luck getting to net zero with that plan.

2024 US electricity percent shares
Natural Gas: 42.5%
    Nuclear: 17.8
       Coal: 14.9
       Wind: 10.3
      Hydro:  5.5
Large Solar:  5.0
Small Solar:  1.9
    Biomass:  0.8
  Petroleum:  0.3
      Other:  0.9

Renewables data can be found here:
https://www.eia.gov/electricity/monthly/epm_table_grapher.php?t=table_1_01_a

_ Pete

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2

Meanwhile, 2/3rds of my 12 year cap gain on Sempra went to money heaven on their dour outlook yesterday.

Steve…ouch

3

People generally hold utilities for the dividend, not so much for the capital gains. Is the dividend being cut? If not, then your dividend income will remain the same and there should be no real effect.

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4

No. They increased the divi a bit. About a 57% payout for the midpoint of their 2025 guidance…about a 3.5% yield…still smarts tho.

Steve

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5

It might be informative to review the capacity factors for the various energy sources used to generate electricity. Capacity factor is the percentage of electricity that a given power plant produces over a certain period of time, compared to how much electricity it could produce, if it ran at full power output for the entire period.

A few points should be emphasized up front:

  1. Peaker power plants will have lower capacity factors, as they are mostly used only during times of high power demand. These tend to be gas turbines, running on natural gas, diesel fuel, or other fossil fuels.

  2. Some types of power plants are used as load-followers. These plants can ramp up and ramp down their output, as load conditions require. These tend to be the natural gas combined cycle plants, and some coal-fired plants, and so will tend to have lower capacity factors than if these plants were run at a constant output.

  3. The intermittent renewables can only produce power when the sun is shining or the wind is blowing.

2024 capacity factors for fossil-fueled power plants:

Coal:                42.6%
Natural Gas-
     Combined Cycle: 59.7%
        Gas Turbine: 14.7
      Steam Turbine: 20.5
Internal Combustion: 20.2
Petroleum-
      Steam Turbine: 8.5  
        Gas Turbine: 2.1
Internal Combustion: 2.1

2024 capacity factors for non-fossil fueled power plants:

Geothermal:    65.0%
Hydroelectric: 34.5
Nuclear:       92.3
Solar PV:      23.4
Solar Thermal: 24.6
Wind:          34.3
Wood:          55.6
Other Biomass: 59.0

Nuclear plants are mostly run as base-load generators, running at full power output as much as possible, and therefore have the highest capacity factors. These plants are important because there is always a certain minimum load on the grid, that must always be matched with enough generation.

_ Pete

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6

Looked at by themselves these (capacity factors) aren’t all that useful to many people. More informative might be to look at how these numbers are changing over the years.

Mike

7

Good point. There are some long term trends that can be seen. The tables I previously linked to here and here show the capacity factors (CF) for each energy source going back to 2014. If we compare 2014 to 2024, we see the following…

Capacity factors, Fossil Fueled power plants
                     2014      2024
Coal                 60.5      42.6
Natural Gas -
 Combined Cycle      48.6      59.7
 Gas Turbine          8.3      14.7
 Steam Turbine       10.3      20.5
 Internal Combustion 10.8      20.2
Petroleum-
 Steam Turbine       13.0       8.5
 Gas Turbine          1.2       2.1
 Internal Combustion  2.1       2.1
Capacity Factors, Non-Fossil Fuel power plants
                     2014      2024
Geothermal           72.0      65.0
Hydroelectric        37.2      34.5
Nuclear              91.7      92.3
Solar PV             25.6      23.4
Solar Thermal        18.3      24.6
Wind                 34.0      34.3
Wood                 60.0      55.6
Other Biomass        62.7      59.0

Some observations…
Coal CF has decreased from 60.5 to 42.6%. This is probably due to natural gas plants being more economical as the price of gas has come down, and gas is seen as more environmentally friendly. The power companies may see that coal is on the way out, long term, in the US, so the plants are just not run as much, and may not be maintained as well as they once were.

As natural gas has replaced coal to a large extent, the CF of gas burning power plants has increased. Combined Cycle CF has risen from 48.6 to 59.7%. Simple cycle gas turbines, steam turbines and internal combustion CFs have also increased. This might be related to the peaker plants being run more often, to make up for the intermittent nature of the wind and solar farms.

Nuclear CF remains above 91% for each of the last several years.

Wind CF has not changed much, even though the newer wind turbines are larger, taller, and should theoretically have better performance. We are not really seeing it in actual performance.

The average solar PV capacity factor has declined slightly. This might be due to more PV panels being installed in less sunny locations, so their average performance is slightly worse.

_ Pete

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