Coal and gas generation can accommodate 40 to 75% of expected US peak demand growth through 2030

With the US preparing for approximately 90 gigawatts (GW) of peak demand growth through 2030, gas and coal generation will only be able to meet about 37 GW of this growth, according to a new report from Wood Mackenzie.

According to the report, “Power Hungry: Why Gas and Coal Alone Won’t Keep Up with US Power Demand Growth” from Wood Mackenzie, meeting this demand growth through 2030 is the largest challenge faced by the US power sector.

“If more plant retirements are delayed, the value could rise to 67 GW, but significant uncertainty surrounds how many more retirements will be deferred,” Patrick Huang, senior research analyst at Wood Mackenzie.  “90 GW of demand growth is well below the 160 GW of US utilities’ large load commitments tracked by Wood Mackenzie, as supply dictates how much demand growth can materialize.”

Huang added that if coal and gas plants ramp up utilization, the existing thermal fleet could meet up to 47 GW of peak demand growth. This is less than 30% of the large load commitments made by US utilities and will be offset by 98 GW of planned coal and gas retirements (59 GW of peak load contribution lost) through 2030. Further retirement deferrals could keep 50 GW (30 GW of peak load contribution) online past 2030, but even in this scenario coal and gas generation falls short of meeting total demand growth. Since keeping old coal and gas units online for longer is expensive and can run against state priorities, delaying retirements for a large portion of the existing fleet will be challenging.

The report notes that manufacturing bottlenecks are a key constraint on new thermal capacity. Gas turbine orders currently face extended lead times, with new gas plant additions limited to 58 GW (49 GW of peak load contribution) between 2025 and the end of 2030. Furthermore, the rising cost of gas turbines will make these additions very expensive in comparison to current wholesale electricity prices.  Our analysis shows that renewables need to play a key role in making demand growth in the US more affordable.

“While gas and coal generation will play a large role in enabling strong load growth, it’s clear that the existing thermal fleet cannot meet this new demand alone,” said Huang. “Robust investment in renewables and storage will be required to meet US demand growth in this timeframe. Also, given that solar only shines during the day and economic long-duration energy storage is not widely available, wind generation needs to be a key part of meeting demand growth.”