Dive Brief:

• A new report from the U.S. Department of Energy's National Renewable Energy Laboratory (NREL projects significant growth in natural gas and renewables through 2050, as the cost of carbon-free sources declines and gas prices remain low in the mid-term.
• By 2050, the report predicts renewable energy penetrations reach 33%, representing the share of generation provided by renewable energy. Carbon-free generation, including hydroelectric resources, could make up 59% of total generation and the mid-case scenario reaches 44%.
• While rooftop solar has seen significant growth in recent years, the report indicates the future of the resource is "heavily dependent" on the evolution of retail electricity rate structures, system costs, net metering, and other policies.

Dive Insight:

NREL's new report projects an energy supply future that is becoming a more stable vision: one where natural gas prices remain relatively low in the mid-term, and the declining cost of renewables combine to help the United States reduce emissions. Coal, for decades the leading source of energy, will continue its decline in market share.

In the last decade, power sector carbon dioxide emissions declined 21%, with the report pointing to coal-to-gas fuel switching, renewable energy growth and lower electricity demand growth as the cause. NREL's "Standard Scenarios" report examines 18 power sector scenarios, the agency explained in a statement.

"The shale gas revolution has led to an abundance of low-cost natural gas and, with it, a dramatic increase in gas-fired generation," according to the report. "Similarly, renewable generation technologies have experienced large reductions in cost and improvements in performance...These increases in generation from natural gas and renewables have precipitated a decline in coal generation to levels not seen since the 1980s."

Average capacity factors for the country’s combined-cycle generators rose from 35% in 2005 to over 56% in 2015, and gas is expected to be the leading source of electricity generation this year.

While coal's decline has been well-documented and that trend is expected to continue, the near-term outlook is less linear and will see a small uptick. According to the U.S. Energy Information Administration, coal will generate 31% of the country's power next year, compared with 30% this year. Gas will decline from 34% this year to about 33% in 2017, in part due to an expected rise in gas prices.

Even so, coal production is expected to decline 17% this year, to the lowest levels in for decades, but will rise again next year. Next year, non-hydro renewables are expected to exceed 1 billion kWh/day for the first time, while generation shares of nuclear and hydropower will remain unchanged.