Electricity Generation, Capacity, and Sales in the United States

Electricity Explained:Electricity Generation, Capacity, and Sales in the United States

Important terms to know when learning about electricity generation and consumption are:

  • Generation: measures the amount of electricity produced over a given period of time. Most power plants use part of the electricity they generate to operate the plant. Net generation excludes the electricity used to run the plant. Energy storage systems can have negative net generation because they use more energy to charge the storage system than the storage system produces.
  • Capacity:refers to the maximum electric output that a power plant can provide under specific conditions.
  • Salesthe amount of electricity sold to end users, which makes up most of U.S. electricity consumption.
Some electricity generated is lost during transmission and distribution. In addition, some electricity consumers generate electricity and use most or all of it themselves; this is called direct use. These users include industrial, commercial, and institutional facilities, as well as homeowners with their own generators. The United States also imports and exports some electricity to and from Canada and Mexico. Total U.S. electricity consumption equals U.S. retail electricity sales plus direct use.

The U.S. Energy Information Administration (EIA) publishes data on total U.S. electricity generation and electric generating capacity:

  • Utility-scale:includes electricity generation and capacity from power plants with at least 1,000 kilowatts, or 1 megawatt (MW), of electricity generation capacity.
  • Small-scale:includes generators with less than 1 MW of generating capacity and is generally located near or at the place where the electricity is consumed. Rooftop solar photovoltaic systems make up most small-scale systems.

Electricity Generation

In 2023, net generation from utility-scale generators in the United States was about net üretim 4.178 billion kilowatt-hours (kWh), or approximately 4.18 trillion kWh. In addition, EIA estimates that about 73.62 billion kWh (around 0.07 trillion kWh) was generated by small-scale solar photovoltaic (PV) systems. In 2023, about 60% of U.S. utility-scale electricity generation came from fossil fuels (coal, natural gas, and petroleum), about 19% from nuclear power, and about 21% from renewable energy sources.
  • Percentage shares of U.S. utility-scale net electricity generation by primary energy source in 2023:1
  • Natural gas: 43.1%
  • Nuclear: 18.6%
  • Coal: 16.2%
    • Renewables (total): 21.4%
    • Non-hydroelectric renewables: 15.6%
    • Hydroelectric: 5.7%
  • Petroleum and other: 0.8%

Electricity Generation Capacity

To provide consumers with an uninterrupted electricity supply, grid operators require power plants to produce and deliver the right amount of electricity to the grid at all times so that real-time electricity demand can be met and balanced. In general, power plants do not produce electricity at full capacity every hour, and most generation units can adjust their output. Operating strategies for generators can include:
  • Baseload service: generally meets the minimum or base demand on the system. Baseload generation units usually operate almost continuously. Nuclear plants typically operate as baseload due to low fuel costs and technical limitations on load-following operations. Geothermal, biomass-fueled units, and many large hydro generators also often operate as baseload sources because of low fuel costs. In industrial applications requiring process heat, combined heat and power generators that provide plant support services also generally operate as baseload sources.
  • Intermediate load service:forms the middle layer of the generation stack and supports load-following operations. Intermediate generators vary their output with changing demand over time and are generally suitable for following changes in electricity demand both technically and economically. Many natural gas combined-cycle units operate as intermediate sources because of low operating costs and their ability to ramp up and down quickly.
  • Peaking service:helps meet electricity demand when it is highest, peak such as during hot summer afternoons or cold weather periods. Peaking units generally operate for only a few hours to meet short periods of demand and support air-conditioning loads. Daily peaking units are usually natural gas- or petroleum-fueled internal combustion engines or combustion turbines. In general, these generators are relatively inefficient and have high operating costs, but they provide valuable service during peak periods. Other peaking units may operate seasonally for several days or weeks to support the grid during very hot or very cold weather. In some cases, pumped-storage hydroelectric and conventional hydroelectric units can also provide power to support grid operations during peak-demand periods.
Additional electricity generator categories include:
  • Intermittent renewable resource generators,including wind and solar power plants, which generate electricity only when wind and solar resources are available
  • Energy storage systems,which use electricity (from wind and solar power or another energy source) to charge a storage device and then discharge it to provide electricity when needed. Energy storage supports electric grids in several ways. In some cases, storage may be paired or co-located with other generation sources, improving the economic efficiency of one or both systems.
  • Distributed generators,which are connected to the electric grid but primarily meet the electricity demand of an individual building or system. Sometimes these systems can generate more electricity than the site consumes and send excess electricity to the grid. Many small-scale solar photovoltaic systems are distributed generators.
  Over the last decade, the sector’s generation portfolio has changed significantly: intermittent generators have grown from a relatively small share of the industry to a much larger share. In 2010, wind and solar generators accounted for only about 4% of total utility-scale generation capacity. Now, these intermittent sources represent about 18% of total capacity. As a result, generator operating strategies have changed across the industry. Units that previously operated as baseload may now follow an intermediate-load strategy. Some units in both baseload and intermediate categories may vary output across a wide range if they have operational flexibility, in order to control startup and shutdown costs .A commonly used metric for classifying operating strategy is the capacity factor,which is the ratio of actual output to potential output. Because many variables affect capacity factor, there are no absolute definitions separating baseload, intermediate, and peaking strategies. In general, however, capacity factors of 70% or higher indicate baseload operation. Peaking units usually operate with a capacity factor of less than 15%. Intermediate operation falls between baseload and peaking.

Changes in Energy Sources for U.S. Electricity Generation

The mix of energy sources used for electricity generation in the United States has changed over time, especially in recent years. While natural gas and renewable energy sources have made up a growing share of U.S. electricity generation, coal-fired generation has declined. In 1990, coal-fired power plants accounted for about 42% of U.S. utility-scale generating capacity and about 52% of total electricity generation. By the end of 2023, coal’s share of utility-scale generating capacity had fallen to about 15%, and its share of utility-scale electricity generation had declined to about 16%. The share of natural gas-fired generating capacity increased from 17% in 1990 to 43% in 2023, and its share of electricity generation rose from 12% in 1990 to 43% in 2023, more than tripling. Most U.S. nuclear and hydroelectric plants were built before 1990. Nuclear energy’s share of total annual U.S. electricity generation has remained relatively stable at about 20% since 1990. Electricity generation from hydroelectric power has remained the leading renewable source of utility-scale annual electricity generation (through 2014), although it fluctuates year to year depending on rainfall patterns.

Electricity Generation from Renewables Other Than Hydroelectric

In recent years, electricity generation from renewable sources other than hydroelectric has increased steadily, especially due to growth in wind and solar generating capacity. Since 2013, annual utility-scale electricity generation from non-hydroelectric renewable sources has been higher than hydroelectric generation. Wind energy’s share of total U.S. utility-scale generating capacity increased from about 0.2% in 1990 to about 12% in 2023, and its share of total utility-scale electricity generation rose from about 1% in 1990 to about 10% in 2023. Although solar still represents a relatively small share of total U.S. generating capacity and electricity generation, solar generating capacity has grown significantly in recent years. Utility-scale solar generating capacity increased from about 314 MW (314,000 kW) in 1990 to about 91,309 MW (about 91 million kW) by the end of 2023. About 98% of this is solar photovoltaic systems and 2% is solar thermal-electric systems. In 2023, solar energy accounted for about 3.9% of total U.S. utility-scale electricity generation, up from 0.1% in 1990. In addition, according to EIA estimates, the U.S. had 47,704 MW of small-scale solar PV generating capacity at the end of 2023, and small-scale PV systems generated about 74 billion kWh of electricity.

Factors Affecting the Energy Source Mix in Electricity Generation

The main factors contributing to recent changes in the U.S. electricity generation mix include:

  • The combined effect of several years of low natural gas prices and the performance advantages of new natural gas technologies, especially high-efficiency combined-cycle generators
  • Declining costs associated with wind and solar energy installations
  • Government requirements to use more renewable energy sources
  • Availability of government and other financial incentives for building new renewable capacity
  • Federal air pollution emission regulations for power plants
  • Changes in electricity demand
The general decline in natural gas prices has been an important factor in the rise of natural gas-fired electricity generation and the decline of coal-fired generation since 2008. When natural gas prices are relatively low, high-efficiency natural gas combined-cycle generators can provide electricity at lower cost than coal-fired generators. In this case, coal-fired plants operate less and generate less revenue, which reduces profitability and decreases the incentive to invest in new coal-fired generating capacity. Persistently low natural gas prices encourage the development of new natural gas-fired generating capacity. Unlike coal-fired generators, natural gas-fired generators:
  • Can be added in smaller increments to meet grid generation capacity needs
  • Can respond more quickly to changes in hourly electricity demand
  • May have lower compliance costs for environmental regulations
 

Retail Electricity Sales

Retail electricity sales in the United States were about 3,861 billion kWh in 2023 (approximately 3.9 trillion kWh), a decline of about 66 billion kWh compared with 2022. Retail sales include net imports from Canada and Mexico (imports minus exports).
  • Electricity sales to U.S. retail customers and their percentage shares of total sales in 2023 were:2
  • Residential— 1,455 billion kWh38%
  • Commercial— 1,375 billion kWh36%
  • Industrial— 1,025 billion kWh27%
  • Transportation— 7 billion kWh<1%

U.S. retail electricity sales to major end-use sectors, 2023

Bar chart with 3 data series.
Interactive column chart showing U.S. retail electricity sales to major end-use sectors in 2023.
Chart 1 shows category labels on the x-axis.
Chart 1 shows billion kilowatt-hours on the y-axis. The data range is from 1025 to 1455.
Billion kilowatt-hours. U.S. retail electricity sales to major end-use sectors, 2023.Residential, commercial, industrial. 300, 600, 900, 1,200, 1,500, 1,800. Source: U.S. Energy Information Administration, Electric Power Monthly, February 2024, preliminary data. Note: Sales to the transportation sector were approximately 7 billion kilowatt-hours.
End of interactive chart.

Click to enlarge.

Electricity Providers

Electricity providers, which sell bundled electricity services—energy (electricity) and delivery—to customers can be grouped as full-service providers and and other providers. Full-service providers generate electricity from power plants they own and sell that electricity to customers or independent power producers. Full-service providers include:
  • Yatırımcı sahipliğinde olan kamu hizmetleripublicly traded electric utilities
  • Publicly owned entities:municipalities, state energy agencies, and municipal marketing authorities
  • Federal entities:electricity producers and marketers owned or financed by the federal government
  • Kooperatiflermember-owned and operated electric utilities
  Diğer sağlayıcılar, provide electricity market services and only electricity delivery services to customers of retail electricity providers. Other providers are generally electricity marketers operating in states with customer choice Full-service providers carry out the actual delivery of electricity to consumers on behalf of electricity marketers. In addition, direct electricity transactions also take place between independent power producers and (usually large) electricity consumers.  
  • In 2022, the shares of electricity sales by provider type were:3
  • Investor-owned public utilities — 57%
  • Public and federal entities — 16%
  • Cooperatives — 13%
  • Other providers — 15%
  In addition to sales to end-use customers, electricity is commonly traded in wholesale markets or through bilateral contracts.
1 Source note 1: U.S. Energy Information Administration, Electric Power MonthlyFebruary 2024, preliminary data. Petroleum and other gases include landfill gas, other biomass gases (including blast furnace gas and other fossil-fuel-derived gases), hydroelectric pumped storage, and other sources (non-biogenic municipal solid waste, batteries, hydrogen, purchased steam, sulfur, fuels derived from tires, and other miscellaneous energy sources). Totals may not equal 100% due to independent rounding. 2 Source note 1: U.S. Energy Information Administration, Electric Power MonthlyFebruary 2024, preliminary data. 3 Source note 1: U.S. Energy Information Administration, United States Electric ProfileTable 9, November 2023.
Last updated: July 16, 2024; 2023 data are preliminary.