American’s demand for electricity will grow at a sluggish pace over the next two decades, as economic fallout from the Great Recession takes a toll on the nation’s power industry, according to a report by research and consulting firm Wood Mackenzie.
The nation’s power demand will grow by about 1.1 percent through 2030, Wood Mackenzie analysts projected, instead of the nearly 2 percent growth experienced during past two decades.
In other words, the level of electricity the country was expected to use by 2019 now won’t be reached until 2030, the firm forecasted.
“The crystal ball seems to have not served us well in predicting the Great Recession or its severe impacts on energy demand,” said Wood Mackenzie senior analyst Prajit Ghosh in a written statement. “Given the recessionary impacts on gross domestic product, industrial activity, real estate demand and unemployment, all coupled with a possible behavioral drag on energy demand, demand growth expectations have been reduced to much lower levels.”
As the slow economy suppressed power demand, efforts to reduce electricity use through government mandates on light bulbs and improve the energy efficiency of home appliances have further stripped the nation’s need for electricity.
Traditional power generators who rely on coal and natural gas won’t be the only ones to feel the impact, the report noted. Several state mandates require a certain percentage of total power use come from wind, solar and other renewable energy sources. When total electricity demand doesn’t increase, that limits incentive to build new wind or solar farms.
On the up side, analysts have cut their forecasts on CO2 emissions due to declining demand and replacement of coal-based power generation to cleaner-burning natural gas, Wood Mackenzie analysts noted.
“Since 2008, projected emissions levels through 2030 have declined 7 percent on average as recent policy and investment trends indicate a less carbon-intensive generation mix,” the report stated.