In 2024, energy consumption grew 3.1% and reached a historical record of 4.3 million gigawatts/hour.
The reason? A perfect storm of artificial intelligence, cryptocurrency mining and electric cars is revolutionizing the country’s energy matrix, forcing energy generators to adapt to a market in full transformation.
How is the energy map set up in the US? Let’s see:
Natural gas remains the main source of electricity generation, representing 42.7% of the total. In 2024, the generation from gas, increased by 3.3%, reaching a historical record of 1.86 million GWh. Why keep dominating?
- The US is the largest producer and exporter of natural gas in the world.
- The price of gas is historically low due to excess supply.
What energy source is gaining ground? Renewable energy (wind, solar, hydroelectric, geothermal and biomass) are the great winners. They grew by 3.1% in 2024, reaching 24.2% of the total generation.
Wind energy rose 7.7%, representing 10.3% of the total. Texas leads production with 28% of the country’s wind energy. And solar energy was the big surprise: it grew by 26.9% and already represents 6.9% of the total.
This growth is no accident. In the world of energy, the cost is everything, and while gas remains cheap, renewable energies have the great advantage that their “fuel” is free.
And the big loser? Coal, without a doubt. The generation of energy from coal fell 3.3% in 2024, reducing its participation to 14.9% of the total, its lowest level in history. In 2001, coal represented 51% of the US energy matrix today is an obsolete technology, displaced by gas efficiency and renewable competitiveness. The generating companies did not build a single new coal plant in the last decade and are closing the old ones.
And nuclear energy? Nuclear energy remains stable, representing 17.8% of the total generation. In 2024, production increased only 0.9%, without major changes in the participation of the energy mix. The problem of the nuclear sector remains the same as always: plants are expensive and take too long to build. Meanwhile, renewables continue to gain participation.
How can you invest to take advantage of these trends?
There are various opportunities according to the energy source. Natural gas continues to dominate the market and can be used through ETFs such as Ung (gas price), XOP (exploration and production) or AMLP (infrastructure and transport).
On the other hand, for those who seek exposure in clean energy, there are ETFs such as ICLN (renewable energies in general), so (solar) and fan (wind). Meanwhile, nuclear energy remains stable, with options such as Ura (Uranium) and NLR (nuclear generation companies).
What role does the rest of the world play?
The US energy panorama cannot be analyzed isolated, since it is strongly influenced by what happens in other large economies. China, despite being the largest coal consumer in the world, is leading the transition to renewable energies with accelerated growth in solar and wind, in addition to a strong commitment to nuclear energy. Its installed capacity in these sources is growing at a greater rate than that of the US, which could position it as the leader in clean generation in the coming decades. Europe, on the other hand, has advanced faster in reducing the use of fossil fuels, but faces challenges in its nuclear transition and energy price stability, due to its strong dependence on imported gas.
Internal level, US energy policy is directly influenced by the government on duty. The administration of Joe Biden has promoted a transition to clean energy, promoting subsidies and regulations favorable to renewables. The Inflation Reduction Law (IRA) has been key in this process, encouraging investment in energy storage and solar and wind generation. However, Donald Trump does not commune with these policies and could reverse them, to return the focus to gas, oil and fracking, which would alter the rhythm of the energy transition.
This market is changing. The big question is: how far the demand can grow? If the data centers, AI and electric vehicles continue to accelerate, energy companies will have to invest in more generation and transmission networks. The next few years will define whether the energy mix remains dominated by natural gas or if the transition to renewables advances more strongly.
The energy game changed and investors who understand this transformation can find interesting opportunities in the coming years.
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Note: The material contained in this note should not be interpreted under any point of view as an investment council or recommendation for the purchase or sale of a particular asset. This content has only educational ends and represents only an opinion of the author. In all cases it is advisable to advise with a professional before investing.
Source: Ambito
David William is a talented author who has made a name for himself in the world of writing. He is a professional author who writes on a wide range of topics, from general interest to opinion news. David is currently working as a writer at 24 hours worlds where he brings his unique perspective and in-depth research to his articles, making them both informative and engaging.
