Category Archives: Department of Energy

EIA Annual Outlook
 Misses The Mark
 On Threat To Utilities,
 Generation Revolution

Coal, Department of Energy, Distributed Generation, Forecasts, Solar, Utilities, Wind, , , ,

So many studies, so little time. Just in the past couple of weeks analyses from DOE’s Energy Information Administration, Bloomberg New Energy Finance, British Petroleum and the International Renewable Energy Agency have hit my inbox (thank goodness we have moved beyond the old hardcopy stage, just those reports alone would have contributed to the world’s ongoing deforestation problem), and having the time to study them all has been difficult. But muddling through them does provide some fascinating glimpses of where the energy industry is today, and where it might be headed in the years to come.

EIA’s 2016 Annual Energy Outlook, released in abbreviated form last month with its full rollout slated for early July, includes more sobering news for electric utility executives: Sales growth really is gone, and it isn’t coming back. In its analysis, EIA estimates that overall electricity sales will grow at an average rate of 0.7 percent from 2015-2040, essentially unchanged from the 0.6 percent growth rate posted from 2000-2015. But a closer look at the numbers shows even that relatively anemic growth estimate may be optimistic.

For example, EIA estimates that electric sales in the residential sector will rise by an average of just 0.3 percent a year from 2015-2040—well under even the paltry 1.1 percent annual growth recorded from 2000-2015. According to EIA, the slow growth can be attributed to rising energy efficiency, especially in the lighting sector, and the broad adoption of distributed photovoltaics (PV). But what is most intriguing about EIA’s estimate is that virtually all of the growth occurs in the out-years (see chart below): From 2015 through 2030 there is essentially zero growth in residential sales. Specifically, EIA puts 2015 sales in the sector at 1,402 billion kilowatt-hours (kwh)  and projects that sales in 2030 will rise to just 1,416 billion kwh—an increase, if you can call it that, of 0.1 percent annually. Rather than calling this growth it would be more appropriate to write it off as a rounding error. It also represents the continuation of a longer-term trend: Residential electric sales in 2007, just before the onset of the Great Recession, totaled 1,392 billion kwh. Measured from that starting point, sales are expected to climb just 24 billion kwh in 23 years, a miserly 0.07 percent annual increase.

Continue reading EIA Annual Outlook
 Misses The Mark
 On Threat To Utilities,
 Generation Revolution →

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Rare Good News
 On Electric Demand
 Comes With A Catch

Department of Energy, Forecasts, Utilities, , ,

Good news can be hard to come by in the electric utility industry these days—overall growth is stagnant, new technologies and competitors are aching to get into the market, and customers are beginning to act like, get this, customers, seeking something more than just a monthly bill from their provider. So a report showing soaring growth anywhere in the sector should be a cause for celebration—except, of course, when it includes its own version of a self-destruct mechanism.

The report in question is EIA’s recently released commercial buildings energy consumption survey (CBECS), a treasure trove of data, somewhat dated to be sure, but compelling all the same.  The occasional report—it has been released nine times since 1979—estimates that electricity use in commercial buildings totaled 4,241 trillion Btu in 2012 and accounts for more than 60 percent of the sector’s total energy consumption. While EIA touts the fact that electricity consumption in commercial buildings has almost doubled since it began tracking usage in 1979, the real newsworthy growth has occurred since 1995. Since then, consumption of electricity in commercial buildings has risen by roughly 50 percent, from around 2,750 trillion Btu to 2012’s 4,200-plus level. That 50 percent-plus rise in 17 years amounts to more than 3 percent annually—a level of demand growth that would thrill today’s growth-starved utility executives.

But there is a catch, which I’ll get to in a minute.

Continue reading Rare Good News
 On Electric Demand
 Comes With A Catch →

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Slow And Steady:
 Efficiency Measures
 Hold Utility Load Growth
 To Record Lows

Department of Energy, Forecasts, Utilities, ,

In today’s rapidly changing energy industry, efficiency measures seldom show up in the headlines—slow, steady improvements simply don’t have much `sizzle.’ But while they may be boring, these slow, steady improvements are rewriting the rules in the utility industry.

The latest indication of just how important these efficiency-related changes are occurred last month when the North American Electric Reliability Corporation released its annual long-term reliability assessment (which can be found here) of the U.S. bulk power electric system. For the first time, NERC said, its 10-year forecast for the annual growth rate in both summer and winter peak demand had dropped below 1 percent—“falling to the lowest rates on record.”

Continue reading Slow And Steady:
 Efficiency Measures
 Hold Utility Load Growth
 To Record Lows →

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Taking A Step Back
 Brings Energy Revolution
 Clearly Into Focus

Department of Energy, Distributed Generation, Environment, Forecasts, Solar, Uncategorized, Wind, ,

It is easy to get lost in the day-to-day minutia of the revolution under way in the energy industry—announcements of technology improvements, installation milestones and price reductions of all kinds hit my inbox almost daily. But two recent reports, one highlighting where we’ve been and the second pointing to where we are going, are a useful grounding tool, pointing out that while I (and probably many others) often get lost looking at individual trees there is a whole forest out there.

The first report, an Energy Department publication dubbed Revolution…Now (which can be found here), walks through the startling changes in five clean energy technologies during the past five-plus years. While much of this information may be familiar, it is worth a quick review.

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 Brings Energy Revolution
 Clearly Into Focus →

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215 Million And Rising:
 Surge In LED Installs
 Is A Growing Threat
 To Utility Industry

Department of Energy, Environment, Forecasts, Utilities, ,

The cumulative number of light emitting diodes (LEDs) installed across the United States has soared during the past two years—topping 215 million at the end of 2014 according to DOE’s latest data. That’s good for the environment (the amount of source energy needed to power the more efficient LEDs is about 143 trillion British thermal units less than the previous status quo) and consumers (savings topped an estimated $1.4 billion annually in 2014)—but not for growth-starved electric utilities. And, this is just the beginning of a transition that poses serious problems for utilities already grappling with long-term slow-growth forecasts.

In its latest assessment of the LED market (Adoption of Light-Emitting Diodes in Common Lighting Applications, which can be found here), DOE notes that “the adoption of LEDs in general illumination applications is just beginning.” Specifically, while the 215 million figure represents a quadrupling of the number of LEDs installed in just two years, it still amounts to just 3 percent of the U.S. market, which is pegged at some seven billion lighting fixtures.

In a blue sky projection, DOE estimates that if all seven billion lights could be replaced overnight with LEDs, the source energy savings would skyrocket to just under 4,900 trillion Btu (roughly 4.9 quads)—saving customers about $49 billion a year. While we won’t get there overnight, that is the direction we are headed, a direction bound to cause a significant amount of concern in utility C-suites nationwide. (For an earlier analysis of the LED threat, please see this story.)

Continue reading 215 Million And Rising:
 Surge In LED Installs
 Is A Growing Threat
 To Utility Industry →

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