Is Electricity Usage Finally Rising – Or Is It Just a Blip?
by Bob Shively, Enerdynamics President and Lead Facilitator
Since the recession in 2008-2009, the U.S. electricity industry has experienced a new world in which electricity load is flat. Many industry insiders have expressed the opinion that electric companies need to just get used to it since power usage is not likely to significantly increase ever again. Indeed, by the end of 2017 the U.S. had failed to exceed the amount of electric consumption hit in 2007.
Source: U.S. Energy Information Administration Short-term Energy Outlook Data Browser
But preliminary data from 2018 shows a sudden blip, with usage increasing by 2.4% over 2017 and finally exceeding the 2007 usage. Is this finally the rebound that electric companies have been hoping for, or just a temporary spike?
To look for answers, we should first see what types of customers contributed to the rise.
Clearly most of the increase is due to residential customers, with a smaller contribution from commercial customers. Interestingly, industrial usage declined.
Looking at residential customers, we can also determine what parts of the country contributed to the increase:
We can also look at how residential customers use their electricity. Here is the Energy Information Administration’s estimate for usage by end use in 2017:
Source: Energy Information Administration 2107 Annual Energy Outlook
Since the only large usage that we would expect to change that much year to year is space cooling, it appears we may have found our explanation. The amount of cooling required is measured using a factor called the Cooling Degree Day. Cooling degree days for the first nine months of 2018 increased by 4% over the first nine months of 2017. For the East South Central region, cooling degree days for the months May – September increased by a whopping 32%.
So we can now conclude that hot weather is the primary reason for last year’s load growth. If the weather is cooler this year, loads will likely fall back down. At least for now, it does not appear that electric companies have a new boom in demand to celebrate.
Want to learn more about electric supply and demand? Enerdynamics’ online course Electric Supply and Demand is now available. Get details and access to a free demo here.
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