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.
“It’s called a major recession.”
You got it 100% exactly right.
40 percent of energy generated in the industrialized world is used by buildings. Less economic activity equals fewer buildings.
http://www.eia.gov/tools/faqs/faq.cfm?id=86&t=1
I use the 20 years old technology of x10 signals no the power line. Some LED bulbs, as well as certain CFLs, send noise back into the power line and make signal controls unreliable.
You must have some AC induction somewhere in the route.
At the end of the day though, we should use what we like without the government forcing something down our necks.
I’ll catch up with you later, off to hunt some wolves.
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).
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Yeah, you got it. Over half the new electrical generation installed in the USA is solar or wind a large percentage of the solar is off grid. Which takes revenue away from grid maintenance which drives up the costs to the fewer remaining end users. At a certain point the economics of off grid vs grid are going to swing in favor of off grid and the grid will implode.
Curiously the same thing is going to happen in obamacare as fewer healthy people are available to cover the costs of sick people —the costs to people left on the network will rise to where they become prohibitive.
We are going to put in solar in our new place in the mountains. Its not going to be tied to the grid thats for sure.
The first to achieve winter rolling-blackout the northeast U.S.?
The goal of the elitist left is that the peasants not be able to afford energy/electricity/travel/heat/AC AT ALL.
If true, it has to do with economic downturn, not LED and CFL bulbs.
One of the facts of life regarding conservation is, conservation leads inexorably to systemic growth in demand. Gasoline rises to $4? Drivers go fewer miles, even if passenger miles rise due to carpooling, public transit, etc. Some autos with higher fuel economy are sold.
As gasoline remain the same, the threshold of pain rises, and miles driven start to rise to the original levels; and drivers with more fuel efficient vehicles start to drive more miles, rationalizing that they aren’t spending as much on fuel and/or burning as much as they used to.
When the price declines to $3 from $4, driving increases, and carpooling and use of public transport goes down (pooling ones transportation is a grossly inefficient use of time, except in a very few very urban areas, such as LA at rush hours).
I find my electric bill rises in winter, but the fuel oil bill rises above $600 a month, so the extra juice to run the furnace blower doesn’t register by comparison.
Thanks ckilmer.
Carpooling?
My wife, son and I work for the same company and my son only lives about two miles away. We have different responsibilities and therefore work different hours. I go in early, she works late and his hours are at the whim of the structural design department.
We can’t make car pooling work, so how can it really work for anyone else unless you work in an 8 to 5 factory?
Car pooling will never work in Texas.
True, but the people didn't disappear. The population (legal + illegal) continues to increase. And all those people are using juice to some extent. The census estimates show an additional 13m people from 08 to 13.
I guess that’s why I said the very same thing in my post.
I don’t know, I have been using them for 15 years in a 4 story house with renters. Replace maybe 1 or 2 a year. There were no cheap LEDs back then. Have started using some now, but still not that cheap. I have only had one batch of CFLs that failed early. Don’t remember the brand, may have been an off brand, not GE or Phillips. Had a special circular CFL in a kitchen ceiling light. It just burned out after 8 years of constant use. My boyfriend replace the entire fixture ($35) because we could not find a replacement bulb after that length of time. Actually the metal rim of the old fixture was a bit rust pitted, so no great loss.
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