After years of little or no growth in electricity usage, the U.S. power sector is poised for a new era of steady growth in consumption, new reports from the Electric Power Research Institute and the Energy Information Administration indicate.
While the amount of final energy – total energy consumption by end users – is expected to decline more than 20 percent through 2050, electricity consumption is projected to rise between 32 percent and 46 percent during the same period, according to EPRI’s “U.S. National Electrification Assessment,” which was released last month. What’s more, the assessment suggests total electric load in the U.S. could grow by as much as 52 percent by 2050 thanks to efficient electrification, which describes the adoption of end-use technologies such as 3-D printing, electric vehicles, indoor agriculture, and artificial intelligence.
“While some of this load growth will be customer-supplied, capacity to ensure reliability will, in most cases, be supplied by the utility,” EPRI notes in its assessment.
It’s good news for an industry plagued by bankruptcies, plant closures and diminishing revenues.
“For many uses, electricity may serve as a more efficient and economical alternative, with lower environmental impact, offering equal or better service,” according to the assessment.
Meanwhile, the EIA is projecting electricity consumption in the U.S. will grow, on average, 0.9 percent a year through 2050.
The growth will be driven by technological forces inside and outside the power sector. The new power sector will be very different. Decentralized power systems will flourish as entities other than investor-owned utilities and independent power producers enter the power generation market. Today, small and large businesses in every sector can produce their own power to better manage their demand.
Some utilities are redefining their role as a power provider to reflect this ongoing shift in the power market. Expect traditional power companies to evolve into energy management companies charged with managing the complexity created by growing supplies of decentralized power. Expect utilities to begin designing, building and managing onsite power systems for their industrial customers. And expect an overhaul of traditional energy economics that places a higher value on information borne from digitalization.
The heart of this transformation can be found in the digital realm of the Information and Communication Technology (ICT) sector. The technical innovations in this sector are re-shaping entire industries, economies and societies. Innovations based on digital ICT include the introduction of artificial intelligence, the use of augmented reality and self-driving electric vehicles. The power sector isn’t exempt from these ICT-driven evolutions. ICT innovation will be a major factor behind demand growth for electricity worldwide.
In its assessment, EPRI said the potential growth in electricity consumption through efficient electrification can only be achieved by removing regulatory barriers, improving resiliency, modernizing the grid, developing cleaner technologies, and accelerating research.
“Load dynamics will change and shift in response to greater electrification, and new electric loads will provide opportunities for more flexible and responsive demand response, as well as storage,” EPRI wrote. “Realizing such benefits is contingent on investment in a flexible, resilient, and integrated grid and the development of clear market signals.”