The rapid increase in primary energy use in the twentieth century is a hallmark of the modern world. But one form of energy stands out among all the rest: electricity. Energy use from all sources in the United States increased fourfold from 1920 to 2021. But the end use of electricity increased more than one hundred-fold over that same period, much of it generated from fossil fuels. The clear preference by society for electricity relative to other forms of energy is due to its unique physical attributes, which were translated into superior services in illumination and communication, and to unprecedented increases in the productivity of capital, labor, and raw materials in the manufacturing sector.
The 37 MW Telsa-Westinghouse Niagara hydroelectric plant (1896) marked the beginning of the modern electric industry in the United States. Hydropower dominated new additions to generation capacity for the next 50 years, including major additions beginning in the 1930s enabled by the Rural Electrification Act and the “big dam” period in the Bureau of Reclamation. Advances in steam turbine and turbo generator technology and access to large quantities of cheap fossil fuels shifted new capacity additions to coal and natural gas through the 1960s. Nuclear gained significant market share in the 1970s and 1980s. Cheap, abundant natural gas steadily displaced coal beginning in the mid-1990s, and it also filled a capacity gap created by a lack of new investment in nuclear power. Dramatic declines in the cost of electricity from wind and solar, coupled with concerns about climate change reflected in a range of government policies, made those renewable technologies the largest contributors to new capacity beginning in the mid-2000s.
Coal generated about 50% of the nation’s electricity in 1920. Eight decades later it held the same market share, a remarkable run of dominance. It would be difficult to overstate the role that coal played in the nation’s rise to an economic and military superpower and its unprecedented levels of material living standards. The heavy reliance on coal is a major reason why the United States has emitted more carbon dioxide into the atmosphere than any other country.
The effects of government policy on the source of electricity generation are readily apparent. For example, on the heels of the 1974 oil price shocks the 1978 Powerplant and Industrial Fuel Use Act forced utilities to burn coal rather than oil or natural gas. State and regional climate policy such as clean energy and renewable portfolio standards have boosted solar and wind in the last 20 years.
Technological impacts are evidenced by the substitution of gas for coal over the past two decades which was enabled in part by the fracking revolution that rapidly expanded domestic gas supplies. The aforementioned technology-driven cost decline explains much of the recent expansion of wind and solar. Note, however, that wind and solar together generate just 12% percent of electricity in 2021.
Nuclear power’s retention of an 18 to 20% share of generation for 30 years is remarkable given that no new capacity was built for nearly 2 decades. The uprating of existing plants and the extension of reactor lifetimes explain this phenomenon.
In 2021, President Biden signed an executive order that committed the country to reach 100% carbon-free electricity by 2035. Tremendous gains are being made in that direction as measured by new capacity additions. However, generation lags capacity additions due to the long lifetime of generation and transmission infrastructure. New nuclear capacity and some wind and solar projects have long lead times. Reaching carbon neutrality by 2035 in the power sector will require even stronger shifts in policy, technology, and consumer attitudes.