An esteemed colleague suggested the other day that we may be approaching zero growth in electricity consumption, mainly as a result of energy efficiency and demand response.
I’m a data guy, so I figured I’d check it out…
Many of us have seen the famous “Rosenfeld Effect” chart, which shows per capita electricity consumption in California from 1960 to 2008. (Rosenfeld has been called the Father of Energy Efficiency.) Energy consumption for Californians looks pretty flat since the mid-1970s — but for people in the rest of the country, it appears to be steadily rising.
What happens if we look at the past two decades, using Department of Energy and Census Bureau figures?
The growth line for the entire U.S. looks pretty flat, especially since 2000.
And the statistics agree:
- By the decade spanning 1990 to 2000, the average annual increase in consumption (the compound annual growth rate) had dropped to near zero: 0.34% increase per year.
- Then, from 2000 to 2011, the CAGR even went negative: -0.67% per year. This means that average consumption fell.
What about total U.S. electricity consumption — total deliveries to all customers, including the increased population over time? Over the past 10 years, that CAGR was 0.32%. This means that utilities sold a little bit more power, but not much.
Change has happened. The paradigm for utility industry growth has shifted.
This is good news for the environment and for sustainability — but regulators have some real work to do to ensure that utilities remain financially healthy in this new paradigm.