Annual Energy Outlook 2023

with projections to 2050

Annual Energy Outlook 2023 Release at Resources for the Future

Joseph DeCarolis, EIA Administrator

Angelina LaRose, Assistant Administrator for Energy Analysis

March 16, 2023

#AEO2023 www.eia.gov/aeo
What does EIA do?
The U.S. Energy Information Administration (EIA) is the statistical and
analytical agency within the U.S. Department of Energy.

EIA is the nation's premier source of energy information.

By law, our data, analyses, and forecasts are independent of approval by any
other officer or employee of the U.S. government.

Our Annual Energy Outlook 2023 explores long-term energy trends in the
United States.

AEO2023 Release,
RFF March 16, 2023 2
What’s new in the 2023 Annual
Energy Outlook?

• A focus on the narrative

• Technical notes

• Emphasis on the range of results

• New combination cases

AEO2023 Release, RFF

March 16, 2023 3
The AEO2023 includes cases that vary technical and economic assumptions,
including combination cases that extend the bounds of uncertainty
All cases reflect current laws and regulations as of November 2022, including the Inflation
Reduction Act.
Reference 1.9% annual GDP growth; Brent = $101 per barrel (b) in 2050

Economic Growth Low: 1.4% annual GDP growth

Oil Price
Oil and Gas Supply
Zero-Carbon Technology
Cost (electric power sector)
Combination
AEO2023 Release, RFF
March 16, 2023
High: 2.3%
Low: Brent = $51/b in 2050
High: Brent = $190/b in 2050
Low: 50% lower oil and gas resource recovery and 50% higher drilling costs
relative to the Reference case
High: 50% higher oil and gas resource recovery and 50% lower drilling costs
relative to the Reference case
Low: About 40% reduction in cost by 2050
High: No reduction in costs
Combinations of Economic Growth and Zero-Carbon Technology Cost cases
4
AEO2023 Issues in Focus: Inflation Reduction Act
• Inflation Reduction Act Issues
in Focus released today
– No IRA case
– High Uptake case
– Low Uptake case

• Detailed IRA assumptions

available on the AEO website

AEO2023 Release, RFF

March 16, 2023 5
IRA-related caveats to keep in mind
• The IRA contains a complex package of incentives, many of which are challenging to model.

• We do not explicitly include certain IRA provisions in AEO2023 for three general reasons:
– Guidance is not yet available on how a provision will be enacted or how agencies will
implement it.
– Provisions requiring significant model modifications that were not possible to implement this
year.
– Provisions that do not align with our analytic resolution, for example “energy communities.”

• As a result, all energy system impacts of the IRA are not represented in AEO2023.

• We have documented our modeling assumptions related to all IRA provisions, which are available
with today’s AEO2023 release.

• We will refine our estimates over time as IRA implementation details become available and we
update our modeling capability.

AEO2023 Release, RFF

March 16, 2023 6
AEO2023 Highlights
• Energy-related CO2 emissions fall across all AEO2023 cases because of increased
electrification, higher equipment efficiencies, and more zero-carbon electricity
generation.

• Renewable generating capacity grows in all regions of the United States in all
AEO2023 cases, supported by growth in installed battery capacity.

• Technological advancements and electrification drive projected decreases in demand-

side energy intensity.

• The United States remains a net exporter of petroleum products and of natural gas
through 2050 in all AEO2023 cases.

AEO2023 Release, RFF

March 16, 2023 7
AEO2023 Highlights
• Energy-related CO2 emissions fall across all AEO2023 cases because of increased
electrification, higher equipment efficiencies, and more zero-carbon electricity
generation.

• Renewable generating capacity grows in all regions of the United States in all
AEO2023 cases, supported by growth in installed battery capacity.

• Technological advancements and electrification drive projected decreases in demand-

side energy intensity.

• The United States remains a net exporter of petroleum products and of natural gas
through 2050 in all AEO2023 cases.

AEO2023 Release, RFF

March 16, 2023 8
By 2030, energy-related CO2 emissions fall 25% to 38% below 2005
levels
Total energy-related carbon dioxide emissions
million metric tons 2022 percentage relative to 2005
7,000 history projections
6,000 100%
High Economic
5,000 80% Growth-High ZTC
No IRA
4,000 Reference
60% Low Economic
3,000 Growth-Low ZTC
40%
2,000

20%
1,000

0 0%
2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Data source: U.S. Energy Information Administration, Annual Energy Outlook 2023 (AEO2023)
Note: Shaded regions represent maximum and minimum values for each projection year across the AEO2023 Reference case
and side cases. ZTC=Zero-Carbon Technology Cost; IRA=Inflation Reduction Act.

AEO2023 Release, RFF

March 16, 2023 9
In the No IRA and Low Uptake cases, U.S. CO2 emissions fall 26% and 27%, respectively, by
2030 from 2005. The Reference and High Uptake cases go further and reach reductions of
about 33% and 34%, respectively.
Energy-related CO2 emissions
billion metric tons
all sectors electricity sector
2022 3.0 2022
7.5
history projections history projections
6.0
No IRA 2.0
4.5
Low Uptake
3.0
High Uptake 1.0
1.5
Reference
0.0
0.0
2005 2020 2035 2050
2005 2020 2035 2050

Data source: U.S. Energy Information Administration, Annual Energy Outlook 2023 (AEO2023)
Note: Charts include CO2 emissions from fossil fuel and industrial feedstock uses. This scope excludes industrial process emissions,
agriculture, waste, land use, and other greenhouse gases such as methane and hydrofluorocarbons. Industrial emissions include
combined-heat-and-power plants that have a non-regulatory status and small on-site generating systems.

AEO2023 Release, RFF

March 16, 2023 10
AEO2023 Highlights
• Energy-related CO2 emissions fall across all AEO2023 cases because of increased
electrification, higher equipment efficiencies, and more zero-carbon electricity
generation.

• Renewable generating capacity grows in all regions of the United States in all
AEO2023 cases, supported by growth in installed battery capacity.

• Technological advancements and electrification drive projected decreases in demand-

side energy intensity.

• The United States remains a net exporter of petroleum products and of natural gas
through 2050 in all AEO2023 cases.

AEO2023 Release, RFF

March 16, 2023 11
 Total installed generating capacity more than doubles across
most scenarios
Total installed capacity in all sectors, 2022 (history) and 2050
gigawatts

2022
Reference
Low Oil and Gas Supply stand-alone storage
High Oil and Gas Supply solar
wind
Low ZTC oil and natural gas
High ZTC nuclear
Low Economic Growth other
High Economic Growth coal
Low Oil Price
High Oil Price
High Economic Growth-High ZTC
High Economic Growth-Low ZTC
Low Economic Growth-High ZTC
Low Economic Growth-Low ZTC

0 500 1,000 1,500 2,000 2,500 3,000 3,500

Data source: U.S. Energy Information Administration, Annual Energy Outlook 2023 (AEO2023)
Note: ZTC=Zero-Carbon Technology Cost; other=geothermal, biomass, municipal waste, fuel cells, hydroelectric, pumped hydro storage

AEO2023 Release, RFF March 16, 2023 12

Power demand is increasingly met by renewables
U.S. electricity generation by select technologies for all cases
billion kilowatthours
solar wind natural gas
3,000 2022 2022 2022
3,000 3,000
history projections
2,000 Ref 2,000 2,000
Ref Ref
1,000 1,000 1,000

0 0 0
2010 2020 2030 2040 2050 2010 2020 2030 2040 2050 2010 2020 2030 2040 2050
nuclear coal
3,000 2022
3,000 2022

2,000 2,000

1,000 1,000
Ref
Ref
0 0
2010 2020 2030 2040 2050 2010 2020 2030 2040 2050
Data source: U.S. Energy Information Administration, Annual Energy Outlook 2023 (AEO2023)
Note: Shaded regions represent maximum and minimum values for each projection year across the AEO2023 Reference case and side cases.
Ref=Reference case

AEO2023 Release, RFF

March 16, 2023 13
Solar and wind generate a majority of U.S. electricity by 2050 in the
Reference and High Uptake cases
U.S. net electricity generation by fuel
billion kilowatthours
No IRA Low Uptake Reference High Uptake
2022 2022 2022 2022
6,000 history projections 6,000 history projections 6,000 history projections 6,000 history projections

5,000 5,000 5,000 5,000

solar*
4,000 wind 4,000 4,000 4,000
natural
3,000 gas 3,000 3,000 3,000
coal
2,000 nuclear 2,000 2,000 2,000
other**
1,000 1,000 1,000 1,000

0 0 0 0
2005 2020 2035 2050 2005 2020 2035 2050 2005 2020 2035 2050 2005 2020 2035 2050
Data source: U.S. Energy Information Administration, Annual Energy Outlook 2023 (AEO2023)
Note: IRA=Inflation Reduction Act
*Includes utility-scale and end-use photovoltaic generation and excludes off-grid photovoltaics.
**Includes petroleum, conventional hydroelectric power, geothermal, wood and other biomass, pumped storage, non-biogenic municipal waste in the electric
power sector, refinery gas, still gas, batteries, chemicals, hydrogen, pitch, purchased steam, sulfur, and miscellaneous technologies.

AEO2023 Release, RFF

March 16, 2023 14
More intermittent renewables lead to more curtailment and usage
of battery storage
Hourly U.S. electricity generation and load by fuel for selected cases and representative years
billion kilowatthours
Reference case, 2022 Reference case, 2050 Low Oil and Gas Low Zero-Carbon
Supply case, 2050 Technology Cost case, 2050
400 load, excluding
storage
curtailment
300 stand-alone storage
pumped storage
hybrid solar PV
200 stand-alone solar PV
wind
100 hydroelectric
natural gas
combined-cycle
0 natural gas and oil
peakers
nuclear
-100 coal
1 12 24 1 12 24 1 12 24 1 12 24
hour of the day
Data source: U.S. Energy Information Administration, Annual Energy Outlook 2023 (AEO2023)
Note: Negative generation represents charging of energy storage technologies such as pumped hydro and battery storage. Hourly dispatch estimates are
illustrative and are developed to determine curtailment and storage operations; final dispatch estimates are developed separately and may differ from total
utilization as this figure shows. Standalone solar photovoltaic (PV) includes both utility-scale and end-use PV electricity generation.

AEO2023 Release, RFF

March 16, 2023 15
AEO2023 Highlights
• Energy-related CO2 emissions fall across all AEO2023 cases because of increased
electrification, higher equipment efficiencies, and more zero-carbon electricity
generation.

• Renewable generating capacity grows in all regions of the United States in all
AEO2023 cases, supported by growth in installed battery capacity.

• Technological advancements and electrification drive projected decreases in demand-

side energy intensity.

• The United States remains a net exporter of petroleum products and of natural gas
through 2050 in all AEO2023 cases.

AEO2023 Release, RFF

March 16, 2023 16
U.S. energy consumption increases to 2050, and electricity plays an
increasingly larger role
Total energy consumption by end-use sector
quadrillion British thermal units
50
2022
history projections
45

40 industrial
35

30
transportation
25

20 residential
commercial
15

10

0
2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
Data source: U.S. Energy Information Administration, Annual Energy Outlook 2023 (AEO2023)
Note: Total consumption in end-use sectors includes purchased electricity and electricity-related losses. Each line represents
AEO2023 Reference case projections. Shaded regions represent maximum and minimum values for each projection year across the
AEO2023 Reference case and side cases.

AEO2023 Release, RFF

March 16, 2023 17
 Average energy intensity declines through 2050 across all cases
Residential delivered energy intensity Commercial delivered energy intensity
million British thermal units per household thousand British thermal units per square foot
2022
110 2022 110
history projections history projections

100 100

90 90

High Oil and

80 Low Economic 80 Gas Supply
Growth-Low ZTC Reference
Reference Low Oil and
Low Oil and Gas Gas Supply
Supply
70 70
2020 2030 2040 2050 2015 2025 2035 2045
Data source: U.S. Energy Information Administration, Annual Energy Outlook 2023 (AEO2023)
Note: Shaded regions represent maximum and minimum values for each projection year across the AEO2023 Reference case and side cases.
ZTC=Zero-Carbon Technology Cost

AEO2023 Release, RFF

March 16, 2023 18
Light-duty vehicle fuel economy and electric vehicle market share
increase through 2050 due to rising CAFE Standards and other incentives
Light-duty vehicle average fuel economy Market share of electric light-duty vehicles*
miles per gallon percentage of sales
2022 40% 2022
45
history projections history projections
High Oil
40 Price
30%
High Oil Price
Reference
35
Low Oil Reference
Price 20%
30
Low Oil Price
10%
25

20 0%
2010 2020 2030 2040 2050 2010 2020 2030 2040 2050
Data source: U.S. Energy Information Administration, Annual Energy Outlook 2023 (AEO2023)
Note: *Includes battery electric and plug-in hybrid electric vehicles. Shaded regions represent maximum and minimum values for each projection
year across the AEO2023 Reference case and side cases.
AEO2023 Release, RFF
March 16, 2023 19
IRA incentives speed growth in sales of electric vehicles
Market share of electric light-duty vehicles*
percentage
2022
20%
history projections

15%
No IRA
Low Uptake
High Uptake
10%
Reference

5%

0%
2010 2020 2030 2040 2050
Data source: U.S. Energy Information Administration, Annual Energy Outlook 2023 (AEO2023)
Note: *Includes battery electric and plug-in hybrid electric vehicles. IRA=Inflation Reduction Act

AEO2023 Release, RFF

March 16, 2023 20
AEO2023 Highlights
• Energy-related CO2 emissions fall across all AEO2023 cases because of increased
electrification, higher equipment efficiencies, and more zero-carbon electricity
generation.

• Renewable generating capacity grows in all regions of the United States in all
AEO2023 cases, supported by growth in installed battery capacity.

• Technological advancements and electrification drive projected decreases in demand-

side energy intensity.

• The United States remains a net exporter of petroleum products and of natural gas
through 2050 in all AEO2023 cases.

AEO2023 Release, RFF

March 16, 2023 21
In all cases, we project that the United States will remain a net exporter
of petroleum products through 2050
Petroleum and other liquids Petroleum and other liquids Petroleum products net
consumption production exports
million barrels per day million barrels per day million barrels per day
2022 2022 35 2022
35 35
history projections history projections High Oil history projections
and Gas 30
30 30
Supply
High Oil
25 25 25
and Gas
Supply Reference
20
20 Reference 20
Low
15 Growth- 15 15
Low Oil
Low ZTC and Gas High Oil
10 10 10
Supply Price
Reference
5 5 5 Low Oil
Price
0 0 0
2010 2020 2030 2040 2050 2010 2020 2030 2040 2050 2010 2020 2030 2040 2050

Data source: U.S. Energy Information Administration, Annual Energy Outlook 2023 (AEO2023)
Note: Biofuels are not included in petroleum and other liquids production or consumption. Shaded regions represent maximum and minimum values for
each projection year across the AEO2023 Reference case and side cases. ZTC=Zero-Carbon Technology Cost

AEO2023 Release, RFF

March 16, 2023 22
 Liquefied natural gas exports drive production; domestic consumption
remains stable
Natural gas consumption Dry natural gas production Liquefied natural gas exports
trillion cubic feet trillion cubic feet trillion cubic feet
60 2022 60 2022 2022
High Oil 60
history projections history projections history projections
and Gas
50 High 50 Supply 50
Economic
Growth- Reference
40 40 40
High ZTC

30 Reference 30 Low Oil 30

and Gas
Low Oil Supply
20 20
and Gas 20
Supply High Oil
10 10 Price
10 Reference
Low Oil
0 0 Price
2010 2020 2030 2040 2050 0
2010 2020 2030 2040 2050
2010 2020 2030 2040 2050

Data source: U.S. Energy Information Administration, Annual Energy Outlook 2023 (AEO2023)
Note: Shaded regions represent maximum and minimum values for each projection year across the AEO2023 Reference case and side
cases. ZTC=Zero-Carbon Technology Cost

AEO2023 Release, RFF

March 16, 2023 23
Upcoming AEO2023 Issues in Focus
• Liquefied Natural Gas (LNG)
Issues in Focus coming next
month
– High LNG Price case
– Low LNG Price case
– Fast Builds + High LNG Price case

AEO2023 Release, RFF

March 16, 2023 24
 View the full report at eia.gov/aeo
Contact us at AnnualEnergyOutlook@eia.gov

AEO2023 Release, RFF

March 16, 2023 25