EIA forecasts growing biofuel use and solar power surge in 2025
The U.S. Energy Information Administration (EIA) has released its latest Short-Term Energy Outlook (STEO), indicating that biofuels will continue to play an increasing role in the U.S. energy mix. According to the report, biomass-based diesel products now account for 9% of total U.S. distillate fuel consumption—up from 5% in 2022. This growth underscores the expanding use of renewable energy sources in traditional fuel markets, driven by environmental policies and sustainability goals.
The EIA’s forecast also predicts that Brent crude oil prices will rise to an average of USD84 per barrel in 2025, as global oil inventories decrease due to OPEC+ production cuts. However, natural gas prices are expected to see moderate increases, with the Henry Hub spot price projected to rise to USD3.10 per MMBtu in 2025 due to increasing U.S. liquefied natural gas (LNG) exports outpacing domestic production.
The report also highlights the significant expansion of solar power generation, which will continue to see record growth, particularly in Texas and California, with a 59% increase in capacity additions in the first half of 2024. These trends reflect a broader shift toward renewable energy and the critical role of policy in driving these changes.
