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Electricity Demand: Uncertain Outlook Creates Risks for Renewable Energy

By Roger S. Conrad on Aug. 13, 2014

Why has US electricity demand failed to rebound from the Great Recession? John Diefendorfer, director of the Energy Information Administration’s office of electricity, coal, nuclear and renewables analysis, postulated several possible reasons in his conference presentation.

Improved energy efficiency has contributed to flat demand, with consumers and businesses replacing older appliances and equipment with newer versions that consume less electricity.

Meanwhile, utilities have rolled out smart-grid infrastructure to promote better understanding of usage patterns and optimize these systems to limit waste and reduce overall consumption.

By the same token, sub-metering enables landlords to monitor and control energy use within individual units, sticking the heaviest consumers with higher bills.

The rise of rooftop solar and other forms of distributed generation likewise reduces energy demand.

Rising income inequality since the Great Recession has also taken a toll on demand, as many Americans have cut back on air conditioning and heating to lower their bills.

Downsizing among retiring Baby Boomers and greater awareness of energy conservation among Millenials have also contributed to this phenomenon.

Taken together, these factors explain the nonexistent recovery in electricity demand after the Great Recession.

Whether this “zero load growth scenario” will persist is the subject of much debate.

 

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