EIA Publishes 2026 Energy-Sector Forecasts
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The U.S. Energy Information Administration (EIA) recently issued 2026 energy-sector forecasts as part of the most recent edition of its Short-Term Energy Outlook (STEO). The January 2025 STEO covers projections for energy production, consumption, and prices through 2026. While nothing found in the report is Earth shattering, there are a few interesting tidbits nonetheless.
Key Highlights of the STEO’s 2026 Energy-Sector Forecasts
To peruse the full analysis, you can access the STEO here. What follows is a bullet list of some of the more relevant highlights as they relate to electric and natural gas utilities.
- According to the report, 2024 saw a 2% increase in the consumption of electricity in the U.S., the most material increase in nearly 20 years. The EIA expects a similar percentage increase in 2025 and then again 2026. The main reason for the increase in consumption is greater demand for electricity in the commercial and industrial (C&I) sectors.
- In terms of power generation, short-term increases in capacity will be driven largely by solar capacity. The STEO projects a 26 GW increase (+34%) in new solar capacity in 2025, and the addition of 22 GW (+17%) in 2026. This increase is in contrast to an expected 3% drop and 1% drop in natural gas generation over the next 2 years, respectively. And while the report reveals coal-fired generation will drop by 1% in 2025, it is expected to actually increase slightly in 2026 as natural gas fuel becomes more expensive.
- As I mentioned, the cost of natural gas is expected to rise, putting the squeeze on consumer wallets. The STEO forecast calls for an increase from $2.20 per million British thermal units (MMBtu) in 2024 to $3.10 per MMBtu in 2025 and $4.00 per MMBtu in 2026. The cause of this increase is that demand growth will outpace production growth.
To summarize the EIA’s 2026 energy-sector forecasts, between now and 2026, expect power consumption and solar capacity to increase, and natural gas generation to decrease as prices per MMBtu rise.
