Powering Down: Electric Surge Slows
March 10, 2014 2:05 PM
With the exception of an uptick in 2010, electricity sales have fallen since 2008. Experts say the reduction, despite a growing economy, is the result of new federal incentives for more efficient buildings and alternative energy, and state renewable energy portfolio mandates. In Utah, where the state has goals rather than mandates, the solar roof atop the Salt Palace Convention Center is a technology showpiece. The project, begun in 2008 and completed in 2012, saves the convention center in Salt Lake City about 20% on its electric bill. See the full story: Slowing Electric Sales Reflect Generation, Conservation Shifts
Electricity sales are expected to rise slightly this year and grow at a 0.9% annual rate through 2040, according to the U.S. Energy Information Administration. More efficient appliances, net metering and other technologies are expected to contribute to the trend.
Natural gas will supplant coal as the dominant source of fuel for electric power generation, according to the U.S. Energy Information Administration.
Distributed generation represents a new model for power production, allowing any source of power, even solar arrays on home rooftops, to contribute to the grid. For utilities, such distributed generation represents lost sales from their central power plants.
Distributed generation is expected to continue its growth as centralized power systems gradually give way. Morningstar analysts have called distributed generation the largest disruptive threat to utilities.
Smart meters allow utilities to more closely match consumption and production of electricity. The electronic devices record consumption in intervals of an hour or less and provide that information for the utilities.
Some utilities, including San Antonios CPS Energy, are preparing for peak loads this summer with a system called demand response that allows them to power down air-conditioners, heaters or pool pumps when demand peaks. Demand response is part of CPSs plan to save 771 megawatts of power by 2020, the equivalent of a large power plant.
Growth in demand for electricity is expected to continue falling, even as the nation expands its use of electric-powered devices. Over the past five years, consumption has declined in every year except 2010.
Chart shows average monthly price of electricity was higher in 2013 (red line) than in 2012 (blue line).
Long-term debt of investor-owned utilities shows rise through 2012 amid increasing efficiency. Investor-owned utilities have taken advantage of federal and state tax incentives to invest in more efficient networks while public utilities commissions have sought ways to incentivize public power utilities for their environmental measures.
