Electricity rates are partially dependent on which of various energy sources, such as oil, gas, coal or nuclear and renewable sources, are used to generate power in your area. Electricity rate trends can vary greatly depending on region or state. For example, Idaho has low retail rates because much of the state’s energy is generated from hydroelectricity. Other states like Hawaii experience higher electricity prices due to the high cost of crude oil.
Electricity demand is expected to increase in 2021, especially in regions that will likely require more cooling and heating as climate change impacts progress and drives up electricity prices. What does that mean for you? We’ve put a quick guide together.
Forecasted Changes in Electricity Rates: Pricing and Consumption
Retail electricity prices in the U.S. have increased over the last decade. This trend is projected to continue as natural gas prices will likely escalate, raising electricity rates. U.S. prices are expected to rise as the natural gas supply is exposed to higher-paying international markets.
As energy use increases and the economy recovers, the Environmental Impact Assessment (EIA) expects to see higher carbon dioxide emissions in 2021. It also forecasts a 19% increase in coal production in 2021 as compared to 2020.
How Will Additions of Renewable Electricity Capacity Impact 2021 Electricity Rate Trends?
In May 2020, the International Energy Agency (IEA) projected that additions of renewable electricity capacity would decrease by 13% in 2020 compared with 2019. The outlook considers ongoing market developments and policy uncertainty, such as newly financed projects and the most recent auctions. The update also sheds light on possible delays in construction activity due to:
- Emerging financing challenges.
- Social distancing guidelines.
- Lockdown measures.
- Supply chain disruptions.
That said, the report’s forecast for renewable capacity additions in 2021 does look more promising.
Top 4 Trends Characterizing the Evolving Energy Industry Landscape
In 2021, the evolving energy industry landscape is purported to be characterized by:
- Heightened disaster readiness: Digital tools deployed by utility companies may increase in order to address extreme weather events and COVID-19.
- Increased scale: Oil company investments in renewable energy, transport electrification and storage technologies are forecasted to grow.
- New battery business models: The electrification of transportation is projected to experience unprecedented growth in 2021.
- Consolidation: In September 2020, the Federal Energy Regulatory Commission (FERC) issued a ruling that could help consolidate the energy industry’s competitive landscape in 2021.
Use RateAcuity to Learn About 2021 Electricity Rate Forecasts!
Any business that needs access to electricity trends can benefit from what RateAcuity has to offer. We serve users in a wide range of industries, including:
- Alternative energy providers.
- Energy service companies.
- Research organizations.
- Equipment and meter suppliers.
- Energy management software developers.
Access National Electricity Rate Data With RateAcuity
The experts at RateAcuity can help you enhance your energy management plans by accessing on-demand 2021 electricity rate trends. We’ll help you save money and time with an up-to-date energy rate database and a convenient web portal for your own research.
If you’re interested in learning more about the RateAcuity electric rate database and what it can do for your business, reach out today! You can also request a free 14-day trial and our team will send your credentials shortly.