“Non-renewable” energy sources (such as Oil and Petroleum Products, Natural Gas, Natural Gas Liquid, Coal, and Nuclear), as well as “renewable” energy and “alternative fuels” (such as Hydro, Solar, Wind, Geothermal, Biomass, and Biofuels), help to satisfy the nation’s energy needs. Fossil fuels and nuclear power are considered non-renewable sources of energy. Coal and natural gas play large roles in the generation of electricity as well as in industrial processes such as the manufacturing of steel. Hydro, solar, wind, biomass, biofuels, and geothermal are all considered “renewable” forms of energy and comprise varying levels of supply in this country. They are classified as renewables since their source is considered to be virtually unlimited. Of these, solar, wind, biomass, biodiesel, and geothermal are all considered “alternative” energy sources since they are not the “traditional” kind (fossil fuels, nuclear, and hydro).
The following chart is from EIA reported data and shows major energy sources and percent shares of U.S. electricity generation at utility-scale facilities in 2023. Please note that in 2023, natural gas had the largest share (43.1%) in U.S. electricity generation, renewables were in the second place (21.4%), and nuclear had the third place (18.6%). As shown in Figure 1, renewable energy sources contribute to about 21% of the U.S. electricity production at utility-scale facilities as of 2023, with about 10.2% wind power, 5.7% hydro, and 3.9% solar. Other renewable sources, such as biomass and geothermal, have a minor share.
Text description of the Sources of U.S. Electricity Generation image.
U.S. Electricity Generation in 2023
Total = 4.18 trillion kilowatt hours (kWh)
- Natural Gas: 43.1%
- Nuclear: 18.6%
- Coal: 16.2%
- Renewables: 21.4%
The renewables are broken down as follows:
- Wind: 10.2%
- Hydropower: 5.7%
- Solar: 3.9%
- Biomass: 1.1%
- Geothermal: 0.4%
Figure 2 below shows the breakdown of fuel sources used in the generation of electricity throughout history. As you can see, the single largest fuel had been coal until around 2015. After that, natural gas took the top place, and continued to expand. The shift, or "fuel switching," was driven by increased domestic gas production, environmental regulation (natural gas is "cleaner" than coal), and relatively low gas prices during 2010-2020. The contribution from nuclear remained largely stable, while renewables also experienced a rapid expansion since 2010.
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U.S. electricity generation by major energy source, 1950-2023
billion kilowatthours
Petroleum and other, renewables, nuclear, natural gas, coal
Data source: U.S. Energy Information Administration, Monthly Energy Review and Electric Power Monthly, February 2024, preliminary data for 2023
Note: Includes generation from power plants with at least 1 megawatt electric generation capacity.
Figure 3, below, displays the renewable energy sources that contribute to power generation. As you can see, there has been a rapid increase in wind and solar power generation. However, it will take decades for alternative fuels to make a substantial contribution to the energy portfolio in the United States. Thus, there is a need to continue to use fossil fuels and nuclear power to “bridge” the gap. How the former (fossil fuels and nuclear power) are delivered to the market and how they are priced is the main focus of this course.
Text description of the Renewable electricity generation image.
Renewable electricity generation 1950 - 2023 (history)
Geothermal: Geothermal generation was relatively stable, and very low, from 1990 - 2023.
Biomass: Biomass generation has remained steady at about 50 - 60 billion kWh from 1990 - 2023.
Hydroelectric: Hydroelectric generation varied widely between about 220 billion kWh and 350 billion kWh from 1990 - 2023.
Utility-scale and end-use solar: Solar generated almost zero kWh before 2010. It rose from almost zero to about 165 billion kWh by 2023.
Wind: Wind power generated almost no power until 2004. From 2004 until 2023, it rose to about 425 billion kWh, more than 30 times of 2004 generation level.
Now that we have clarified the difference between renewable and non-renewable sources of energy from the electricity generation perspective, let’s take a look at the production and consumption of energy in the United States on a macro level.