EIA Forecasts 2020 Summer Electricity Demand To Be The Lowest Since 2009

June 16, 2020

by Paul Ciampoli
APPA News Director
Posted June 16, 2020

The U.S. Energy Information Administration (EIA) on June 10 said it expects U.S. electricity demand to total 998 billion kilowatt hours this summer, the lowest level of summer electricity consumption in the United States since 2009 and 5% less than last summer.

EIA expects electricity consumption to be lower this year largely as a result of efforts to reduce the spread of COVID-19.

Most of the expected decline in retail electricity sales occurs in the commercial and industrial sectors, which EIA forecasts to be 12% and 9% less, respectively, than during summer 2019. EIA said it expects residential electricity sales to grow by 3% this summer because more people are working from home and following social distancing practices.

In its “Today in Energy” report, EIA noted that normally, weather is one of the primary factors in determining electricity demand in the residential and commercial sectors.

The National Oceanic and Atmospheric Administration (NOAA) is projecting that U.S. cooling degree days for June, July, and August 2020 will be 1% lower than last summer.

“This summer, however, other factors are affecting electricity demand more than temperature,” EIA said. “Although state and local governments are relaxing stay-at-home orders, social distancing guidelines will likely result in Americans spending more time at home than usual this summer. In addition, many people that had worked in offices are now working from home, shifting electricity demand from the commercial sector to the residential sector.”

EIA noted that macroeconomic indicators are primary drivers in its forecasts for electricity consumption in the commercial and industrial sectors.

EIA’s short-term economic assumptions are based on a macroeconomic model from IHS Markit. This model projects non-farm employment will fall by 13% in 2020 and that the electricity-weighted industrial production index will contract by 12% in 2020, EIA said.