Energy Efficiency, No Longer an Equalizer?

Electrification, decarbonization, digitalization, domestic manufacturing, powering the business sector and fleets of electric vehicles, all are doubling global electricity demand.  For decades, electricity demand was flat, making the work of forecasting and planning straightforward for grid operators.  Come 2035, the doubling demand is expected to plateau despite strong population expansion and economic growth.  Compiled by Grid Strategies, the first nationwide compilation of utility load growth, forecasts 38 GW’s of new power demand in the U.S.

Until now, new end uses that add to load were canceled out by improved energy efficiency that reduced load.  But according to The Organization for Economic Cooperation and Development forum, energy efficiency as an equalizer won’t last.  The limits of this equation will be realized.  New demand will no longer be fully offset by energy efficiency gains.

When demand was flat, regulators could control costs with a reactive process.  Now, a proactive approach will better prepare the grid for what’s coming. Overall, utility engineers and regulators need better modeling and data of anticipated load to prepare for fluctuating demand.  According to McKinsey more efficient technologies will become available in all sectors “driving down energy consumption even in large industrial countries like China,” and not a moment too soon. 

If load growth doubles in next 5 years, will the U.S. electric grid be ready to handle such significant increase?  Will additional ways to offset demand with new technologies and efficiencies emerge?