According to Financial Association News, in the first half of this year, US electricity developers have raised electricity generation growth to the highest level in 21 years, indicating that the demand for electricity brought by AI and data centers is increasing significantly.

The report released by the US Energy Information Agency (EIA) on Monday showed that from January to June this year, the US electricity generation increased by 20.2GW, the highest increase in the same period since 2003. The new electricity generation in the first half of this year was 21% higher than the same period in 2023.

According to EIA survey, power developers are expected to achieve a year-on-year increase in US electricity generation of 42.6GW in the second half of this year.

Solar energy is still the main driver of growth.

The surge in data center electricity demand and the promotion of electrification have increased the demand for electricity generation. EIA expects that most of the new electricity supply in the United States will come from carbon-free energy, including solar energy and battery storage.

Like in 2023, solar energy accounted for the largest share of new US installed capacity in the first half of 2024. In the first half of this year, the total new solar capacity was 12GW, accounting for 59% of all new capacity. Texas and Florida accounted for 38% of the new solar capacity in the United States.

The second-largest newly added capacity so far this year is battery storage, accounting for 21% of all new capacity (4.2GW). The new battery storage is mainly concentrated in four states: California (37% of the total in the United States), Texas (24%), Arizona (19%), and Nevada (13%).

In the second half of this year, US power developers plan to add 42.6GW of new installed capacity, nearly 60% of which comes from solar energy (25GW), followed by battery storage (10.8GW) and wind energy (4.6GW).

This means that only this year, the increase in electricity generation brought by new solar projects will reach a record high of 37GW.

The retirement rate of traditional gas-fired power generation slows down.

However, it cannot be denied that with the continuous increase in energy demand, the retirement rate of coal and gas-fired power plants has indeed slowed down. EIA said that compared with the same period last year, the retirement rate of power generation capacity of operators in the first half of 2024 decreased by 45%.

In the first half of this year, operators retired a total of 5.1GW of installed capacity, compared to 9.2GW in the same period last year. Among the retirement capacity in the first half of this year, 53% used natural gas as fuel, followed by coal, accounting for 41%.

In the second half of this year, about 2.4GW of installed capacity is planned to be retired, including 0.7GW of coal and 1.1GW of natural gas.

Editor/Somer