Posted on 03/06/2014 10:48:25 PM PST by ckilmer
It is a multi-generational truth that electricity consumption only increases. This is best seen in the US where, since 1949, electricity demand has marched upward in a nearly uninterrupted pattern with the country never experiencing two consecutive years of negative growth.
Even here in Australia with data going back to 1961, we have never experienced two consecutive years of negative growth either.
Figure 1 – US and Australia Electricity Consumption (Billion Kilowatt hours)
Electricity demand falls in USA in four of last five years
However, in the US, how is it that in four of the past five years to 2012, electricity demand has indeed fallen? In fact, the same unprecedented softening in electricity consumption is happening in many places around the world (Figure 2).
Figure 2 –Compound Annual Growth Rate for Electricity Demand for Selected Countries
Source: Bloomberg, national statistical departments. Long term is: Australia – 51 years; US – 63 years; Japan – 20 years; Germany, France, Italy and UK – 22 years.
Why has electricity demand fallen?
While the global financial crisis and subsequently weak economic environment are partially to blame for the decline, we believe there are three other contributing factors:
1. Rise of distributed generation
2. Increasing energy efficiency
3. Behavioural changes
Distributed generation is a term to describe the shift away from producing energy near a fuel source (which is typically far away from consumers) to producing near the consumer. The best example of this is solar panels on rooftops, where electricity is produced and consumed onsite.
No power bill from rooftop solar panels – getting consumers off the power grid
This can be extended to other forms of micro generation and energy storage, which collectively reduce energy lost from long distance transmission and harden the system against unplanned outages. Much of the micro-generation (rooftop solar panels, microturbines, fuel cells and Combined Heat and Power (CHP) units) is occurring behind the meter, meaning consumers are reducing their use of grid power. As explained by Edison International, it has seen the consumption share of industrial users in Southern California go from one-third of total electricity consumption to only 10 per cent as many installed super-efficient CHP units onsite.
Rooftop solar installations are now doing the same thing with residential and commercial electricity demand, as they swap local grid power with self generation and, in some cases, even put excess power back into the grid. Solar power and CHP units are both established technologies and within financial reach of much of the population, indicating this trend will continue.
LED light bulbs use up to 90 per cent less electricity
The most efficient watt is the one you don’t use because it uses no resources to produce it at all. This simple idea is embodied in energy efficient products and services, which is gaining significantly more attention. LED light bulbs use up to 90 per cent less electricity as a comparable incandescent light bulb. Insulation in your home immediately cuts energy bills. Recycling an aluminium can uses 95 per cent less energy than making it from virgin materials. Collectively, these efficiency measures are impacting consumption as the high cost of energy brings the issue sharply into focus for consumers and businesses. The price of energy is not going lower and, as a precious resource, it just makes sense for its use to continue to be carefully rationed.
Perhaps because conservation and the environment have become mainstream issues, utilities are telling us they are seeing behavioural differences between their younger and older customers. While an older customer would simply turn on the aircon when it is hot, younger customers are increasingly just opening a window. While their evidence seems to be more anecdotal than scientific, the Australian Bureau of Statistics noted in a recent study of social trends that four out of five people (80 per cent) who reduced their electricity usage reported this was due to efforts to conserve energy.
In contrast, saving money and lifestyle changes was given as a reason only about one in five times (20 per cent). Attitudes take a long time to form and to change but once entrenched are difficult to dislodge. We suspect a new generational trend is becoming entrenched that recognises our individual actions have ramifications for the collective.
Winners and losers in energy market
How energy is produced, transported and consumed is in constant flux due to a multitude of factors. These factors will result in winners and losers.
Just as falling electricity consumption is bad for the owner of a generator, the winners will be those companies that reduce a customer’s dependence on the grid.
You're gonna have to esplain that.
Exactly. Major production requiring a lot of electricity is down as well as homeowners now watching what they use electricity for and when.
The government will tell us “green” and energy efficient products for appliances and consumer items (e.g., those effing CFLs) are the main reason. But we know better.
The media will fall on their pens at the altar of Obama rather than put the blame where it belongs.
My experience is the CFLs do not last like they say they will. There are electronics inside the base that perform the same function as the ballast in a conventional fluorescent light and they always seem to be the failing components. I get maybe 2 years if I’m lucky....
Closing factories and sending the production to other countries contributes to a significant reduction in the demand for electricity.
This is the real answer.
You are getting 5-8 yrs? I must be buying the wrong brand.
I work in a large power plant in NYC. We can burn natural gas or #6 fuel oil. Since the spike in oil prices in 2007 and the drop in gas prices, we’ve almost exclusively burned gas.
However, during this colder than usual winter, we’ve been at top load on oil only due to gas restrictions. In fact, the district operator even asked us to fire up the unit that was in the middle of a turbine outage because it could burn oil. They must have been desperate.
FYI our ability to burn oil in the future is in question due to ever increasing regulations. Well at least until there is a black out during the next brutal winter...
plus the bulbs that don’t wear out for 5 to 8 years.We are seeing about a year before the cheap azz HV power supply blows up. YMMV, but probably not.You are getting 5-8 yrs? I must be buying the wrong brand.
Fight the Free Sh☭t Nation
Interesting, So when demand for gas is up, you sorta take a back seat. That is horrid that oil is being restricted as well. These people making these decisions are fools, they have no idea what they are doing which leads you to the fact it is deliberate to destroy us, without a power grid that has over capacity for planned and un-planned shutdowns, we will be a 3rd world nation shortly. Which fits with the fundamental transformation and us getting our comeuppance.
Thank you for the info....I’m about to buy some CFLs today for my kitchen lighting.
Is there a brand you recommend better than another?
The joke around here is the water company pushed and pushed for people to conserve water...you’d save money ...they told us. So millions did what they were told...and water use declined and rates declined for a while.
Now we’re seeing skyrocketing rates for the little water we use. When a local talkshow host challenged the water company and sewer company...
They said the massive rate increases were due to “over conservation” which was causing insufficient income to maintain the systems. LOL.
I look to reports like this about electricity and our failing power grid to also be the direct result of the ‘green agenda’ too. The unintended consequence of ‘over conservation’ that doesn’t account for a minimum of use to maintain the systems, nor the inexpensive sources that have historically made the most financial sense (ie. coal).
I’d suggest they take a look at our industrial meltdown and out sourcing needs. U.S. industry has been greatly downsized and there is no longer a demand for electricity in the American manufacturing fields. Better take a look at the Chinas need for electrical power to see where the demand REALLY is.
I agree with the other posters that the “Great Recession” is the number one reason for the decrease in electrical consumption.
That said I think the business world has gotten much better at efficiency. They’ve had to. The fat days of the 1990s and early 2000s are gone. Sales people used to stop by my office almost every week asking me if I wanted to go to lunch or wanted tickets a ball game. That has come back a little bit but not nearly to the scale it used to be at. Thousands of companies are living on much thinner margins than they used to and they are running as lean as possible.
Cutting fixed budget items like your electrical costs are hugely important to businesses right now. I’ve never seen it as much a priority as it has been the last few years.
I wonder about that for two reasons. First, during this long term recession I wonder if the market for cheap Chinese goods is nearly what it was. My second question would be is there a good way to determine what China's electrical demand really is? I've no doubt that any numbers their government would supply would be as phony as the economic data they release.
I’m an electrician and can tell you CFLs are crap. If you want long lasting cheap lamps, just pick up LEDs, they’re more expensive, but those will last far longer.
Deetroit, large areas in St Louis, Memphis, Baltimore, Philadelphia are no longer populated
The LED bulbs are known for RF interference and power line noise generation. No thank you.
Not in my experience. I guess if you can still find the old regular bulbs that’d be good.
LEDs will save you a pile though after the initial setup costs.
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