Total US power sales projected to grow slowly as electricity intensity declines through 2040

Decline in electricity intensity caused by adoption of energy-efficient technologies

electricity sales

Source: U.S. Energy Information Administration, Annual Energy Outlook 2016

The adoption of more efficient technologies will drive a decline a electricity intensity for American residential. commercial and industrial customers through to 2040, as power consumption grows less than one per cent annually, according to the U.S. Energy Information Administration’s most recent Annual Energy Outlook(AEO2016) Reference case.

In 2015, 3.7 trillion kWh of electricity were sold, and total electricity sales are projected to rise 0.7 per cent annually through the projection period.

The residential sector currently purchases the most electricity, with a 38 per cent share of total electricity sales in 2015.

However, sales in the commercial sector are projected to surpass those in the residential sector in the early 2020s.

The AEO2016 Reference case, which reflects current laws and regulations, includes the U.S. Environmental Protection Agency’s Clean Power Plan (CPP).

The CPP allows state regulators to encourage customers to purchase specified energy-efficient technologies as a part of state compliance strategies.

The AEO2016 Reference case assumes that consumers will receive subsidies of 10 per cent or 15 per cent between 2020 and 2025 for certain energy efficient appliances, equipment, and building envelope improvements.

electricity sales

Source: U.S. Energy Information Administration, Annual Energy Outlook 2016

 The residential sector currently is the largest electricity-consuming sector, with 1.4 trillion kWh sold in 2015.

Electricity sales in the residential sector are projected to grow by 0.3 per cent per year in the Reference case from 2015 through 2040 as the number of households increases by 0.8 per cent per year.

Residential energy intensity is expected to decline, with the average purchased electricity per household falling 11.3 per cent from 2015 to 2040.

Federal efficiency standards for most major end uses, including lighting, space cooling and heating, and water heating, as well as state and local building energy codes, are the main reasons for the electricity intensity decline.

Electricity sales to commercial consumers are projected to increase at an average annual rate of 0.8 per cent from 2015 to 2040.

Commercial sector electricity intensity (electricity sales per square foot of floorspace) is projected to decline 0.3 per cent per year as total commercial sector floorspace increases 1.1 per cent per year.

Federal energy efficiency standards, as well as technological improvements in lighting, refrigeration, space heating, and space cooling, contribute to the decline in electricity intensity.

Electricity sales to industrial consumers are projected to rise 1.1 per cent per year on average, from 1.0 trillion kWh in 2015 to 1.2 trillion kWh in 2040.

With the value of industrial shipments projected to grow 1.9 per cent per year in the Reference case, industrial sector electricity intensity, or electricity sales per dollar of industrial shipments, declines at an average annual rate of 0.8 per cent from 2015 to 2040.

The decline in projected electricity intensity results from the adoption of more energy-efficient technologies and structural changes in the economy toward less electricity-intensive industries.

A recent extension of federal tax credits for residential and commercial solar photovoltaic (PV) systems, combined with the expected continuation of declining PV prices, spurs increased adoption of residential and commercial PV in the AEO2016 Reference case projection.

Total building PV capacity grows at 8.6 per cent annually in the AEO2016 Reference case.

Generation from residential PV systems reaches 90 billion kWh, and commercial system generation reaches 36 billion kWh by 2040.

Residential and commercial electricity sales would be 5.0 per cent and 1.7 per cent higher, respectively, in 2040 without the electricity generated by rooftop PV systems.

 

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