Energy and Power

Total electricity consumption is expected to decline

In the short term, electricity demand fluctuates in response to business cycles, weather conditions, and prices. Historically, U.S. electricity demand growth has decreased over time, declining to below 2.5% per year in the 1990s from a strong 9% annual growth seen in the 1950s. The growth in electricity demand during 2000-07 averaged just 1.1%.

During the first half of 2009, total U.S. electricity consumption fell by 4.4% compared to the same period a year ago, mainly driven by decline in industrial electricity sales in response to the economic downturn. However, the EIA expects the pace of decline in electricity consumption to moderate in second half of 2009, particularly in the Southwestern U.S. For 2009, the EIA has projected the total U.S. electricity demand to decline by 3.3%.

The electricity demand growth is projected to fall over the period 2007-30, primarily due to efficiency gains (in reaction to rising energy prices) and new standards in energy efficiency for lighting, heating, and cooling appliances. In the base case of its Annual Energy Outlook for 2009 (AEO 2009), the EIA projects electricity demand to rise by 26% from 2007 to 2030, at an average rate of 1% per year.

Growing share of renewable sources in primary energy consumption

The EIA estimates that U.S. primary energy consumption in the end-use sectors will grow at an annual rate of 0.5% from 2007 to 2030, with annual demand for renewable fuels rising the fastest. Biomass consumption is forecasted to increase by 4.4% per year and reach 22% of total marketed renewable energy consumption in 2030, compared to 10% in 2007. Consumption of petroleum in the transportation sector is expected to decline, as consumption of alternate fuels (such as bio-diesel and E85) and blending components (such as ethanol) increase, led by a Renewable Fuel Standards mandate in the Energy Independence and Security Act of 2007 (EISA2007). Natural gas consumption is expected to increase by 0.2% per year over 2007-30, including steady growth in its use in the commercial sector for generating electricity, while coal consumption is expected to grow at the rate of 0.7% per year.