Projected Electricity Demand perspective 1

Excerpts from two perspectives in 2007 of future demand will be posted as food for action, if not thought.

The first perspective is Electricity Demand and Supply; Continued Growth in Electricity Use Is Expected in All Sectors; 7-page PDF is a portion of the Energy Information Administration publication Annual Energy Outlook 2007.

Total electricity sales increase by 41 percent in the [Annual Energy Outlook 2007] reference case, from 3,660 billion kilowatthours in 2005 to between 4,682 billion and 5,168 billion kilowatthours in 2030.

The largest increase is in the commercial sector (Figure 53), as service industries continue to drive growth.

Growth in population and disposable income is expected to lead to increased demand for products, services, and floorspace, with a corresponding increase in demand for electricity for space heating and cooling and to power the appliances and equipment used by buildings and businesses. Population shifts to warmer regions will also increase the need for cooling.

As natural gas becomes more expensive, however, more coal-fired plants are built.

Nuclear generation also increases modestly with improvements in plant performance and expansion of existing facilities, but the nuclear share of total generation falls from 19 percent in 2005 to 15 percent in 2030. The generation share from renewable capacity (about 9 percent of total electricity supply in 2005) remains roughly constant at about 9 percent.

Most areas of the United States currently have excess generation capacity, but all electricity demand regions [Appendix F for definitions; p. 87 of 96) are expected to need additional, currently unplanned, capacity by 2030.

p. 4 Electricity Supply

There is considerable uncertainty about the growth potential of wind power, which depends on a variety of factors, including fossil fuel costs, State renewable energy programs, technology improvements, access to transmission grids, public concerns about environmental and other impacts, and the future of the Federal PTC, which was set to expire at the end of 2007 but has been extended to 2008.

Solar technologies in general remain too costly for grid-connected applications....

p. 5 Electricity Supply (continues)

Electricity generation from nonhydroelectric alternative fuels increases, however, [will be] bolstered by technology advances and State and Federal supports. The share of nonhydropower renewable generation increases by 60 percent, from 2.3 percent of total generation in 2005 to 3.6 percent in 2030.

Wind and solar are intermittent technologies that can be used only when resources are available. With relatively low operating costs and limited resource availability, their avoided costs are determined largely by the operating costs of the most expensive units in operation when their resources are available.

The availability ofwind resources varies among regions, but wind plants tend to displace intermediate load generation. Thus, the avoided costs of wind power are determined largely by the low-to-moderate operating costs of combined-cycle and coal-fired plants, which set power prices during intermediate load hours. In some regions and years, levelized costs for wind power are approximately equal to its avoided costs.

p. 6 Electricity Supply (continues)

The AEO2007 regional RPS [Renewable Portfolio Standard] case assumed [and you know what happens when you "assume" something....] that all States would reach their goals within each program’s legislative framework, and the results were aggregated at the regional level.

In some States, however, compliance could be limited by authorized funding levels for the programs. For example, California is not expected to meet its renewable energy targets because of restraints on the funding of its RPS program.

[RPS states will be "green" and buy wind power from SD wind farmers only so long as there is enough money in the states' coffers. Gad. Wind power is intermitant enough already without this additional flux and flow.]

p. 7 Electricity Prices

Electricity distribution costs are projected to decline by 8 percent from 2005 to 2030, as technology improvements and a growing customer base lower the cost of the distribution infrastructure. Transmission costs, on the other hand, increase by 29 percent, because additional investment is needed to meet consumers’ growing demand for electricity and to facilitate competition in wholesale energy markets.

Economic expansion increases electricity consumption by businesses, factories, and residents as they buy and use more electrical equipment. Thus, over the long term, the rate of economic growth has a greater effect on the range of electricity prices than do oil and natural gas prices, because power suppliers can substitute coal, nuclear, and renewable fuels for expensive natural gas.

In the low and high economic growth cases, electricity prices are 7.8 and 8.4 cents per [kWh], respectively, in 2030.

The Annual Energy Outlook 2007 presents a projection and analysis of US energy supply, demand, and prices through 2030. The complete AEO2007 HTML and PDF versions are here.

Excerpts from the second perspective, North American electricity demand still outpacing resource growth, online at Consulting-Specifying Engineer, will be in the next post.

Best wind.