Fears fade on hybrid batteries

US Electricity Demand Outlook examines EIA forecasts, GDP decoupling, energy efficiency, electrification, electric vehicles, grid load growth, and weather variability to frame long term demand trends and utility planning scenarios.

Key Points

An analysis of EIA projections showing demand decoupling from GDP, with EV adoption and efficiency shaping future grid load.

✅ EIA lowers load growth; demand decouples from GDP.

✅ Efficiency and sector shifts depress kWh sales.

✅ EV adoption could revive load and capacity needs.

Electricity producers and distributors are in an unusual business. The product they provide is available to all customers instantaneously, literally at the flip of a switch. But the large amount of equipment, both hardware and software to do this takes years to design, site and install.

From a long range planning perspective, just as important as a good engineering design is an accurate sales projections. For the US electric utility industry the most authoritative electricity demand projec-tions come from the Department of Energy’s Energy Information Administration (EIA). EIA's compre-hensive reports combine econometric analysis with judgment calls on social and economic trends like the adoption rate of new technologies that could affect future electricity demand, things like LED light-ing and battery powered cars, and the rise of renewables overtaking coal in generation.

Before the Great Recession almost a decade ago, the EIA projected annual growth in US electricity production at roughly 1.5 percent per year. After the Great Recession began, the EIA lowered its projections of US electricity consumption growth to below 1 percent. Actual growth has been closer to zero. While the EIA did not antici-pate the last recession or its aftermath, we cannot fault them on that.

After the event, though, the EIA also trimmed its estimates of economic growth. For the 2015-2030 period it now predicts 2.1 percent economic and 0.3 percent electricity growth, down from previously projections of 2.7 percent and 1.3 percent respectively. (See Figures 1 and 2.)

Table 1. EIA electric generation projections by year of forecast (kWh billions)

Table 2. EIA forecast of GDP by year of forecast (billion 2009 $)

Back in 2007, the EIA figured that every one percent increase in economic activity required a 0.48 percent in-crease in electric generation to support it. By 2017, the EIA calculated that a 1 percent growth in economic activity now only required a 0.14 percent increase in electric output. What accounts for such a downgrade or disconnect between electricity usage and economic growth? And what factors might turn the numbers 
around?

First, the US economy lost energy intensive heavy industry like smelting, steel mills and refineries; patterns in China's electricity sector highlight how industrial shifts can reshape power demand. A more service oriented economy (think health care) relies more heavily on the movement of data or information and uses far less power than a manufacturing-oriented economy.

A small volcano in Argentina is about to fuel the next tech boom – and a little known company is going to be right at the center. Early investors stand to gain incredible profits and you can too. Read the report.

Second, internet shopping has hurt so-called "brick and mortar" retailers. Despite the departure of heavy industry, in years past a burgeoning US commercial sector increased its demand and usage of electricity to offset the industrial decline. But not anymore. Energy efficiency measures as well as per-haps greater concern about global warming and greenhouse gas emissions and have cut into electricity sales. “Do more with less” has the right ring to it.

But there may be other components to the ongoing decline in electricity usage. Academic studies show that electricity usage seems to increase with income along an S curve, and flattens out after a certain income level. That is, if you earn $1 billion per year you do not (or cannot) use ten times a much electricity as someone earning only $100 million.

But people at typical, middle income levels increase or decrease electricity usage when incomes rise or fall. The squeeze on middle income families was discussed often in the late presidential campaign. In recent decades an increasing percentage of income has gone to a small percentage of the population at the top of the income scale. This trend probably accounts for some weakness in residential sales. This suggests that government policy addressing income inequality would also boost electricity sales.

Population growth affects demand for electricity as well as the economy as a whole. The EIA has made few changes in its projections, showing 0.7 percent per year population growth in 2015- 2030 in both the 2007 and 2017 forecasts. Recent studies, however, have shown a drop in the birth rate to record lows. More troubling, from a national health perspective is that the average age of death may have stopped rising. Those two factors point to lower population growth, especially if the government also restricts immi-gration. Thus, the US may be approaching a period of rather modest population growth.

All of the above factors point to minimal sales growth for electricity producers in the US--perhaps even lower than the seemingly conservative EIA estimates. But the cloud on the horizon has a silver lining in the shape of an electric car. Both the United Kingdom and France have set dates to end of production of automobiles with internal combustion engines. Several European car makers have declared that 20 percent of their output will be electric vehicles by the early 2020s. If we adopt automobiles powered by electricity and not gasoline or diesel, electricity sales would increase by one third. For the power indus-try, electric vehicles represent the next big thing.

We don’t pretend to know how electric car sales will progress. But assume vehicle turnover rates re-main at the current 7 percent per year and electric cars account for 5 percent of sales in the first five years (as op-posed to 1 percent now), 20 percent in the next five years and 50 percent in the third five year period. Wildly optimistic assumptions? Maybe. By 2030, electric cars would constitute 28 percent of the vehicle fleet. They would add about 10 percent to kilowatt hour sales by that date, assuming that battery efficiencies do not improved by then. Those added sales would require increased electric generation output, with low-emissions sources expected to cover almost all the growth globally. They would also raise long term growth rates for 2015-2030 from the present 0.3 percent to 1.0 percent. The slow upturn in demand should give the electric companies time to gear up so to speak.

In the meantime, weather will continue to play a big role in electricity consumption. Record heat-induced demand peaks are being set here in the US even as surging global demand puts power systems under strain worldwide.

Can we discern a pattern in weather conditions 15 years out? Maybe we can, but that is one topic we don’t expect a government agency to tackle in public right now. Meantime, weather will affect sales more than anything else and we cannot predict the weather. Or can we?

Related News

• Electricity Forum News

• Power Generation News

Muskrat Falls funding deal delivers federal relief to Newfoundland and Labrador: Justin Trudeau outlines loan guarantees, transmission investment, Hibernia royalties, and $10-a-day child care to stabilize hydroelectric costs and curb electricity rate hikes.

Key Points

A $5.2b federal plan aiding NL hydro via loan guarantees, transmission funds, and Hibernia royalties to curb power rates.

✅ $1b for transmission and $1b in federal loan guarantees

✅ $3.2b via Hibernia royalty transfers through 2047

✅ Limits power rate hikes; adds $10-a-day child care in NL

Prime Minister Justin Trudeau was in Newfoundland and Labrador Wednesday to announce a $5.2-billion ratepayer protection plan to help the province cover the costs of a troubled hydroelectric project ahead of an expected federal election call.

Trudeau's visit to St. John's, N.L., wrapped up a two-day tour of Atlantic Canada that featured several major funding commitments, and he concluded his day in Newfoundland and Labrador by announcing the province will become the fourth to strike a deal with Ottawa for a $10-a-day child-care program.

As he addressed reporters, the prime minister was flanked by the six Liberal members of Parliament from the province. He alluded to the mismanagement that led the over-budget Muskrat Falls hydroelectric project to become what Liberal Premier Andrew Furey has called an "anchor around the collective souls" of the province.

"The pressures and challenges faced by Newfoundlanders and Labradorians for mistakes made in the past is something that Canadians all needed to step up on, and that's exactly what we did," Trudeau said.

Furey, who joined Trudeau for the two announcements and was effusive in his praise for the federal government, said the federal funding will help Newfoundland and Labrador avoid a spike in electricity rates as customers start paying for Muskrat Falls ahead of when the project begins generating power this November.

"Muskrat Falls has been the No. 1 issue facing Newfoundlanders and Labradorians now for well over a decade," Furey said, adding that he is regularly asked by people whether their electricity rates are going to double, a concern other provinces address through rate legislation in Ontario as well.

"We landed on a deal today that I think -- I know -- is a big deal for Newfoundland and Labrador and will finally get the muskrat off our back," he said.

The agreement-in-principle between the two governments includes a $1-billion investment from Ottawa in a transmission through Quebec portion of the project, as well as $1 billion in loan guarantees. The rest will come from annual transfers from Ottawa equivalent to its annual royalty gains from its share in the Hibernia offshore oilfield, which sits off the coast of St. John's. Those transfers are expected to add up to about $3.2 billion between now and 2047, when the oilfield is expected to run dry.

The money will help cover costs set to come due when the Labrador project comes online, preventing rate increases that would have been needed to pay the bills, and officials have discussed a lump-sum bill credit to help households. Though electricity rates in the province will still rise, to 14.7 cents per kilowatt hour from the current 12.5 cents, that's well below the projected 23 cents that officials had said would be needed to cover the project's costs.

Muskrat Falls was commissioned in 2012 at a cost of $7.4 billion, but its price tag has since ballooned to $13.1 billion. Ottawa previously backed the project with billions of dollars in loan guarantees, and in December, Trudeau announced he had appointed Serge Dupont, former deputy clerk of the Privy Council, to oversee rate mitigation talks with the province about financially restructuring the project.

Its looming impact on the provincial budget is set against an already grim financial situation: the province projected an $826-million deficit in its latest budget, and a recent financial update from the provincial energy corporation reflected pandemic impacts, coupled with $17.2 billion in net debt.

After visiting with children from a daycare centre in the College of the North Atlantic, Trudeau and Furey announced that in 2023, the average cost of regulated child care in the province for children under six would be cut to $10 a day from $25 a day. Trudeau said that within five years, almost 6,000 new daycare spaces would be created in the province.

"As part of the agreement, a new full-day, year-round pre-kindergarten program for four-year-olds will also start rolling out in 2023," the prime minister told reporters. "For parents, this agreement is huge."

Newfoundland and Labrador is the fourth province, after Prince Edward Island, Nova Scotia and British Columbia, to sign on to the federal government's child-care program.

Related News

• Electricity Forum News

• Energy Policy News

Australia Renewable Energy Transition: solar capacity growth, net-zero goals, rising electricity demand, coal reliance, EV adoption, grid decarbonization, heat waves, air conditioning loads, and policy incentives shaping clean power, efficiency, and emissions reduction.

Key Points

Australia targets net-zero by 2050 by scaling renewables, curbing demand, and phasing down coal and gas.

✅ Solar capacity up 200% since 2018, yet coal remains dominant.

✅ Transport leads energy use; EV uptake lags global average.

✅ Heat waves boost AC load, stressing grids and emissions goals.

A more than 200% increase in installed solar power generation capacity since 2018 helped Australia rank sixth globally in terms of solar capacity last year and emerge as one of the world's fastest-growing major renewable energy producers, aligning with forecasts that renewables to surpass coal in global power generation by 2025.

However, to realise its goal of becoming a net-zero carbon emitter by 2050, Australia must reverse the trajectory of its energy use, which remains on a rising path, even as Asia set to use half of electricity underscores regional demand growth, in contrast with several peers that have curbed energy use in recent years.

Australia's total electricity consumption has grown nearly 8% over the past decade, amid a global power demand surge that has exceeded pre-pandemic levels, compared with contractions over the same period of more than 7% in France, Germany and Japan, and a 14% drop in the United Kingdom, data from Ember shows.

Sustained growth in Australia's electricity demand has in turn meant that power producers must continue to heavily rely on coal for electricity generation on top of recent additions in supply of renewable energy sources, with low-emissions generation growth expected to cover most new demand.

Australia has sharply boosted clean energy capacity in recent years, but remains heavily reliant on coal & natural gas for electricity generation
To accomplish emissions reduction targets on time, Australia's energy use must decline while clean energy supplies climb further, as that would give power producers the scope to shut high-polluting fossil-powered energy generation systems ahead of the 2050 deadline.

DEMAND DRIVERS
Reducing overall electricity and energy use is a major challenge in all countries, where China's electricity appetite highlights shifting consumption patterns, but will be especially tough in Australia which is a relative laggard in terms of the electrification of transport systems and is prone to sustained heat waves that trigger heavy use of air conditioners.

The transport sector uses more energy than any other part of the Australian economy, including industry, and accounted for roughly 40% of total final energy use as of 2020, according to the International Energy Agency (IEA.)

Transport energy demand has also expanded more quickly than other sectors, growing by over 5% from 2010 to 2020 compared to industry's 1.3% growth over the same period.

Transport is Australia's main energy use sector, and oil products are the main source of energy type
To reduce energy use, and cut the country's fuel import bill which topped AUD $65 billion in 2022 alone, according to the Australian Bureau of Statistics, the Australian government is keen to electrify car fleets and is offering large incentives for electric vehicle purchases.

Even so, electric vehicles accounted for only 5.1% of total Australian car sales in 2022, according to the International Energy Agency (IEA).

That compares to 13% in New Zealand, 21% in the European Union, and a global average of 14%.

More incentives for EV purchases are expected, but any rapid adoption of EVs would only serve to increase overall electricity demand, and with surging electricity demand already straining power systems worldwide, place further pressure on power producers to increase electricity supplies.

Heating and cooling for homes and businesses is another major energy demand driver in Australia, and accounts for roughly 40% of total electricity use in the country.

Australia is exposed to harsh weather conditions, especially heat waves which are expected to increase in frequency, intensity and duration over the coming decades due to climate change, according to the New South Wales government.

To cope, Australians are expected to resort to increased use of air conditioners during the hottest times of the year, and with reduced power reserves flagged by the market operator, adding yet more strain to electricity systems.

Related News

• Electricity Forum News

• Renewable Energy News

FERC Hydropower Licensing Dispute centers on FERC authority, Clean Water Act compliance, state water quality certifications, Federal Power Act timelines, and Army Corps dams on West Virginia's Monongahela River licenses.

Key Points

An inquiry into FERC's licensing process and state water quality authority for hydropower at Monongahela River dams.

✅ Questions on omitted state water quality conditions

✅ Debate over starting Clean Water Act certification timelines

✅ Potential impacts on states' rights and licensing schedules

As federal lawmakers, including Democrats pressing FERC, plan to consider a bill that would expand Federal Energy Regulatory Commission (FERC) licensing authority, questions emerged on Tuesday about the process used by FERC to issue two hydropower licenses for existing dams in West Virginia.

In a letter to FERC Chairman Neil Chatterjee, Democratic leaders of the House Energy and Commerce Committee, as electricity pricing changes were being debated, raised questions about hydropower licenses issued for two dams operated by the U.S. Army Corps of Engineers on the Monongahela River in West Virginia.

U.S. Reps. Frank Pallone Jr. (D-NJ), the ranking member of the Subcommittee on Energy, Bobby Rush (D-IL), the ranking member of the Subcommittee on Environment, and John Sarbanes (D-MD), amid Maryland clean energy enforcement concerns, questioned why FERC did not incorporate all conditions outlined in a West Virginia Department of Environmental Protection water quality certificate into plans for the projects.

“By denying the state its allotted time to review this application and submit requirements on these licenses, FERC is undermining the state’s authority under the Clean Water Act and Federal Power Act to impose conditions that will ensure water quality standards are met,” the letter stated.

The House of Representatives was slated to consider the Hydropower Policy Modernization Act of 2017, H.R. 3043, later in the week. The measure would expand FERC authority over licensing processes, a theme mirrored in Maine's transmission line debate over interstate energy projects. Opponents of the bill argue that the changes would make it more difficult for states to protect their clean water interests.

West Virginia has announced plans to challenge FERC hydropower licenses for the dams on the Monongahela River, echoing Northern Pass opposition seen in New Hampshire.

Related News

• Electricity Forum News

• Energy Policy News

National Grid Demand Flexibility Service helps stabilise the UK grid during tight supply, offering discounts for smart meter users who shift peak-time electricity use, reducing power cut risks amid low wind and import constraints.

Key Points

A National Grid scheme paying smart homes to cut peak-time use, easing supply pressure and avoiding power cuts.

✅ Pays volunteers with smart meters to reduce peak demand.

✅ Credits discounts for shifting use to off-peak windows.

✅ Manages tight margins and helps avert UK power cuts.

National Grid has decided not to activate a scheme on Tuesday to help the UK avoid power cuts after being poised to do so.

It would have seen some households offered discounts on their electricity bills if they cut peak-time use.

National Grid had been ready to trigger the scheme following a warning that Britain's energy supplies were looking tighter than usual this week.

However, it decided that the measure was not required.

Alerts are sent out automatically when expected supplies drop below a certain level. But they do not mean that blackouts are likely, or that the situation is critical.

National Grid said it was "confident" it would be able to manage margins and "demand is not at risk".

Discounts
Earlier on Monday, the grid operator said it was considering whether to pay households across Britain to reduce their energy use to help out on Tuesday evening.

Under the Demand Flexibility Service (DFS), announced earlier this month, customers that have signed up could get discounts on their bills if they use less electricity in a given window of time.

That could mean delaying the use of a tumble-dryer or washing machine, or cooking dinner in the microwave rather than the oven.

Major suppliers such as Octopus and British Gas are taking part, but only customers that have an electricity smart meter and that have volunteered are eligible. About 14 million UK homes have an electricity smart meter.

The DFS has already been tested twice but has not yet run live.

Octopus, the supplier with the most customers signed up, said that some households had earned more than £4 during the hour-long tests, while the average saving was "well over £1".

It came after forecasts projected a large drop in the amount of power that Britain will be able to import from French nuclear power stations on Monday and Tuesday evenings.

The lack of strong winds to power turbines has also affected how much power can be generated within the UK, and efforts to fast-track grid connections aim to ease constraints.

Such warnings are not unusual - around 12 have been issued and cancelled without issue in the last six years, and other regions such as Canada are seeing grids strained by harsh weather as well.

However, they have become more common this year due to the energy crisis, and the most recent notice was sent out last week.

The situation means that the UK will have to import electricity from other sources on Monday and Tuesday evening.

Supplies are also expected be tight in France, forecasters say.

France has been facing months of problems with its nuclear power plants, which generate around three-quarters of the country's electricity.

More than half of the nuclear reactors run by state energy company EDF have closed due to maintenance problems and technical issues.

It has added to a massive energy crisis in Europe which is facing a winter without gas supplies from Russia.

Related News

• Electricity Forum News

• Power Generation News

Work From Home Energy Consumption is driving higher electricity bills as residential usage rises. Smart meter data, ISO-New-England trends, and COVID-19 telecommuting show stronger power demand and sensitivity to utility rates across regions.

Key Points

Higher household electricity use from telecommuting, shifting load to residences and raising utility bills.

✅ Smart meters show 5-22 percent residential usage increases.

✅ Commercial demand fell as home cooling and IT loads rose.

✅ Utility rates and AC use drive bill spikes during summer.

Don't be surprised if your electric bills are looking higher than usual, with a sizable increase in the amount of power that you have used.

Summer traditionally is a peak period for electricity usage because of folks' need to run fans and air-conditioners to cool their homes or run that pool pump. But the arrival of the coronavirus and people working from home is adding to amount of power people are using.

Under normal conditions, those who work in their employer's offices might not be cooling their homes as much during the middle of the day or using as much electricity for lights and running computers.

For many, that's changed.

Estimates on how much of an increase residential electric customers are seeing as result of working from home vary widely.

ISO-New England, the regional electric grid operator, has seen a 3 percent to 5 percent decrease in commercial and industrial power demand, even as the grid overseer issued pandemic warnings nationally. The expectation is that much of that decrease translates into a corresponding increase in residential electricity usage.

But other estimates put the increase in residential electricity usage much higher. A Washington state company that makes smart electric meters, Itron, estimates that American households are using 5 percent to 10 percent more electricity per month since March, when many people began working from home as part of an effort to prevent the spread of the coronavirus.

Another smart metering company, Cambridge, Mass.-based Sense, found that average home electricity usage increased 22 percent in April compared to the same period in 2019, a reflection of people using more electricity while they stayed home. Based on its analysis of data from 5,000 homes across 30 states, Sense officials said a typical customer's monthly electric bill increased by between $22 and $25, with a larger increase for consumers in states with higher electricity rates.

Connecticut-specfic data is harder to come by.

Officials with Orange-based United Illuminating declined to provide any customer usage data, though, like others in the power industry, they did acknowledge that residential customers are using more electricity. And the state's other large electric distribution utility, Eversource, was unable to provide any recent data on residential electric usage. The company did tell Connecticut utility regulators there was a 3 percent increase in residential power usage for the week of March 21 compared to the week before.

Over the same time period, Eversource officials saw a 3 percent decrease in power usage by commercial and industrial customers.

Separately, nuclear plant workers raised concerns about pandemic precautions at some facilities, reflecting operational strains.

Alan Behm of Cheshire said he normally uses 597 kilowatt hours of electricity during an average month. But in April of this year, the amount of electricity he used rose by nearly 51 percent.

With many offices closed, the expense of heating, cooking and lighting is being shifted from employer to employee, and some utilities such as Manitoba Hydro have pursued unpaid days off to trim costs during the pandemic. And one remote work expert believes some companies are recognizing the burden those added costs are placing on workers -- and are trying to do something about it.

Technology giant Google announced in late May that it was giving employees who work from home $1,000 allowances to cover equipment costs and other expenses associated with establishing a home office.

Moe Vela, chief transparency officer for the New York City-based computer software company TransparentBusiness, said the move by Google executives is a savvy one.

"Google is very smart to have figured this out," Vela said. "This is what employees want, especially millenials. People are so much happier to be working remotely, getting those two to three hours back per day that some people spend getting to and from work is so much more important than a stipend."

Vela predicted that even after a vaccine is found for the corona virus, one of the key worklife changes is likely to be a broader acceptance of telework and working from home.

Beyond the immediate shifts, more young Canadians would work in electricity if awareness improved, pointing to future talent pipelines.

"I think that's where we're headed," he said. "I think it will make an employer more attractive as they try to attract talent from around the world."

Vela said employers save an average of $11,000 per year for each employee they have working from home.

"It would be a brilliant move if a company were to share some of that amount with employees," he said. "I wouldn't do it if it's going to cause a company to not be there (in business) though."

The idea of a company sharing whatever savings it achieves by having employees work from home wasn't well received by many Connecticut residents who responded to questions posed via social media by Hearst Connecticut Media. More than 100 people responded and an overwhelming number of people spoke out against the idea.

"You are saving on gas and other travel related expenses, so the small increase in your electric bill shouldn't really be a concern," said Kathleen Bennett Charest of Wallingford.

Jim Krupp, also of Wallingford, said, "to suggest that the employers compensate the employees makes as much sense as suggesting that the employees should take a pay cut due to their reduced expenses for travel, day care, and eating lunch at work."

"Employers must still maintain their offices and incur all of the fixed expenses involved, including basic utilities, taxes and insurance," Krupp said. "The cost savings (for employers) that are realized are also offset by increased costs of creating and maintaining IT networks that allow employees to access their work sites from home and the costs of monitoring and managing the work force."

Kiki Nichols Nugent of Cheshire said she was against the idea of an employee trying to get their employer to pay for the increased electricity costs associated with working from home.

"I would not nickle and dime," Nugent said. "If companies are saving on electricity now, maybe employers will give better raises next year."

New Haven resident Chris Smith said he is "just happy to have a job where I am able to telecommute."

"When teleworking becomes more the norm, either now or in the future, we may see increased wages for teleworkers either for the lower cost to the employer or for the increase in productivity it brings," Smith said.

Related News

• Electricity Forum News

• Workforce Safety News