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U.S. Power Use to Reach Record High in 2022 As Economy Grows

The United States is on track to reach record-high levels of power consumption in the coming years. Rising economic demand and population growth are contributing to this growth. The Electric Reliability Council of Texas (ERCOT) and the Southwest Power Pool, or SWPP, are predicting that by 2022, power use in the U.S. will reach a record high of 4.022 trillion kilowatt hours (kWh) across the U.S.

The EIA has projected that the U.S. power demand will reach a record high in 2022 as the economy continues to grow. In the United States, energy consumption is expected to be 1.486 billion kWh for residential and commercial customers, and 1.367 billion kWh for industrial use. However, that number is expected to decline by nearly 10% due to supply chain challenges resulting from trade disputes and a pandemic. The investment tax credit will end in 2024, so growth should resume after that. In addition, new state entrants are expected to take a growing share of the national market.

The Renewable Fuel Standard (RFS) program is an incentive program to replace petroleum-based fuels with cleaner alternatives. Renewable identification number (RIN) credits are a form of compliance under the RFS program. The RFS program is administered by the U.S. Environmental Protection Agency (EPA). The prices of RINs have reached a record high.

Solar has been the leading source of new electric capacity additions for nine years. In 2021, solar accounted for 46% of all new generating capacity, the largest share in history. Solar has also continued to grow its share of total U.S. electrical generation. And the surge in solar installations has continued in 2019.

The International Monetary Fund (IMF) assessed the United States in late June, saying the country is on track to avoid recession in 2022 and 2023. Meanwhile, business investment in productivity-boosting items continues to rise, at an annual rate of 6.8%. Meanwhile, construction of new manufacturing plants rose by 116 percent in the past year. In addition, more companies are moving their supply chains back to the U.S. instead of to China.

While there are several reasons for this rise, the major one is the rising cost of living. Housing costs make up about a third of the CPI, so their rise is a major contributing factor. In addition to increasing costs of housing, food and shelter also increases the overall cost of living. As a result, housing costs rose 0.8% in June, the largest increase since April 1986.

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