U.S. Electric Power Industry Net Generation, 2007

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Electricity net generation increased in 2007 as electric power producers operated large generators to meet the demands of their consumers. To ensure the continuous flow of electricity, most electricity continues to be generated with steam turbines using coal.

Moderate economic growth and weather-related electricity demand contributed to more than a 2 percent increase in net generation in 2007. According to the Bureau of Economic Analysis, the U.S. real gross domestic product increased 2 percent in 2007. The Federal Reserve Board reported a near 2 percent increase in total industrial production. Also, according to the National Oceanic and Atmospheric Administration, heating degree-days rose almost 7 percent and cooling degree-days rose over 2 percent, resulting in slightly more than 1 percent increase in electricity consumption by the residential and commercial sector. Net generation of electric power increased to 4,157 million megawatthours (MWh) from 4,065 million MWh in 2006.

Most electricity in the United States is generated with steam turbines. Fossil fuels, such as coal, natural gas, and petroleum (oil), or nuclear-fueled reactors heat water in large boilers to make steam. The steam thenturns a generator to produce electricity. In addition, gas turbines, fueled by petroleum or natural gas, use hot gases produced from combustion to rotate turbines. Internal-combustion engines, fueled by diesel oil, are also used to spin generators directly to produce electricity.

Nuclear-powered generation accounts for a 19 percent share, still holding third place behind coal and natural gas. Similar to fossil-fueled steam turbines, heat from the fission of uranium in a reactor is used to make steam to drive the turbine. Between 1996 and 2007, the average annual growth in nuclear generation was almost 2 percent. The continued overall growth in nuclear generation is due to improved capacity utilization, and in 2007, the resumption of commercial operations at the Tennessee Valley Authority's Browns Ferry Unit 1 after a 22-year shutdown.

Hydroelectric generation has the fourth largest share, nearly 6 percent of electricity production. Net generation from conventional hydroelectric plants declined 14 percent from 2006 to 248 million MWh in 2007. This decline is consistent with drought conditions, which according to the National Climatic Data Center (NCDC), prevailed over the West and Southeast for much of the year. Hydroelectric generation uses the water flowing through a pipe to turn blades in a turbine and spin a generator to produce electricity. Stored water is released from reservoirs created by dams in a falling water system, while run-of-the-river systems use the force of the river current to turn a turbine.

All other renewables account for only 3 percent of electricity generation in 2007.

• Biomass includes wood, municipal solid waste (garbage), and agricultural waste, such as corn cobs and wheat straw. They replace fossil fuels in the boiler. The combustion of wood and waste creates steam that is typically used in conventional steam-electric plants.
• Wind power converts the energy captured from wind into electricity. Wind generation was the second largest non-hydropower renewable energy source, contributing 34 million MWh or almost 1 percent of total net generation in 2007.
• Geothermal taps the heat that rises from beneath the earth's surface to power steam turbines.
• Solar energy can use the sun in two ways. Photovoltaic conversion generates electric power directly from the light of the sun in a photovoltaic (solar) cell. Solar-thermal electric generators use the radiant energy from the sun to produce steam to drive turbines.

Non-hydroelectric Renewable Generation (billion kilowatthours)

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Provisions of the American Recovery and Reinvestment Act (ARRA) are reflected in large impacts seen in the renewable electricity generation. The key differences include:

• A significant expansion in the use of renewable fuels for electricity generation, particularly in the near-term. The extension of key Federal tax credits and the new loan guarantee program in ARRA both stimulate increased renewable generation relative to the published AEO2009 reference case and the no-stimulus case (see figure).
• By 2012, wind generation with the ARRA is expected to be more than twice that projected in the no-stimulus case, 201 billion kilowatthours compared to 86 billion kilowatthours and estimated generation of 53 billion kilowatthours in 2008. Although wind capacity growth is projected to slow significantly after the expiration of the Federal tax credits in 2012, by 2030 total installed wind capacity is projected to be 67 percent greater because of the ARRA-stimulated growth than in the no-stimulus case.

More information on this subject can be found in the following EIA publications:
   Electricity projections from the Annual Energy Outlook
   Electricity generation from the Electric Power Annual