Coronavirus shutdown to drop US power consumption to record low

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FOX Business’ Lauren Simonetti says economically sensitive stocks, including industrials and financials, were sharply lower on Wednesday.

U.S. electricity consumption will collapse by a record 5.7% in 2020 due to business closures for coronavirus-linked lockdowns, the U.S. Energy Information Administration (EIA) said Tuesday in its Short Term Energy Outlook (STEO).

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EIA projected total U.S. power demand will drop to 3,675 billion kilowatt-hours (kWh) in 2020 from 3,896 billion kWh in 2019 before rising to 3,711 billion kWh in 2021.

That compares with an all-time high of 4,003 billion kWh in 2018, according to federal data going back to 1949.

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If power consumption falls as expected in 2020, it would be the first time since 2012 that total demand declines for two consecutive years.

EIA said natural gas’ share of generation will rise from 37% in 2019 to 41% in 2020 before dropping to 36% in 2021 as gas prices increase, while coal’s share will slide from 24% in 2019 to 17% in 2020 before rising to 20% in 2021.

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Nuclear’s share of generation will rise from 20% in 2019 to 22% in 2020 before slipping to 21% in 2021, while renewables will rise from 17% in 2019 to 21% in 2020 and 23% in 2021. Both nuclear and renewables will top coal for the first time in 2020.

EIA projected power sales to commercial and industrial consumers will drop by 9.1% and 6.7%, respectively, in 2020 from 2019.

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Electricity sales to the residential sector will only decline about 1.5% in 2020 from 2019 as mild weather reduces heating and air conditioning use even though many people are staying home to curb the spread of the novel coronavirus.

While both the residential and commercial sectors consumed record amounts of electricity in 2018 at 1,469 billion kWh and 1,382 billion kWh, respectively, the industrial sector set its all-time high of 1,064 billion kWh in 2000.

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