A New Estimate by the Energy Information Administration Shows Annual Growth in Electricity Demand Dropping from 1.5 Percent, as Projected in 2007, to 1.1 Percent

In testimony before the Senate Committee on Energy and Resources, Energy Information Administrator Guy Caruso offered a revised forecast of energy consumption in 2030. The Energy Information Administration (EIA) revised its initial 2008 forecast following passage of H.R. 6, the “Energy Independence and Security Act of 2007.”

The EIA projects residential electricity consumption in 2030 to be six percent lower than the previous 2008 estimate as a result of new federal lighting efficiency standards, said Laura Martin, an operations research analyst at EIA.

The estimate also projects a lower rate of demand growth than earlier estimates:

Total electricity consumption, including both purchases from electric power producers and on-site generation, grows from 3,814 billion kilowatthours in 2006 to 4,974 billion kilowatthours in 2030, increasing at an average annual rate of 1.1 percent….

The revised 2008 estimate shows a significant decline in projected demand growth from the 2007 estimate, which had projected a growth rate of 1.5. The earlier 2008 estimate lowered that rate to 1.3 due to changes in economic growth and higher electricity prices.

Explaining the projected demand growth, Caruso explained that the “most rapid growth (1.7 percent per year) occurs in the commercial sector, as building floor space is expanded to accommodate growing service industries.” In addition, “Growing use of electricity for computers, office equipment, and small electrical appliances is partially offset in the AEO2008 reference case by improved energy efficiency.”

Even with the projected efficiency gains from new lighting standards, the Electric Power Research Institute (EPRI) believes additional efficiency improvements such as smart grid technology could significantly lower demand growth further.

This week EPRI revised its roadmap for achieving reductions in carbon emissions to reflect the new EIA estimate. Researchers now project that with robust deployment of new efficiency technology demand growth rate could be driven down to .75 percent a year.