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The economy may be growing, but the energy needed to fuel it has flattened. That’s the good sustainability news. Better efficiencies, clean industries replacing dirty industries, greater awareness, and increased adoption of localized power mean large, conventional utility grids don’t have to grow. While that’s good news for sustainability and an accomplishment that can be celebrated at every level, it’s not good news for the utilities’ business model. From a mix of regulation and the realities of financing large infrastructure programs, utilities are finding it difficult to keep up with changes. Power plants and distribution networks take years or decades to build. Electric cars, localized renewable energy, and overall greater efficiency have made dramatic improvements in the last few years. During the Great Recession, the flattening in demand was attributed to a flat economy. Now, as the economy recovers, it is evident that the change is probably permanent. The consequence for conventional utility companies is a similar price death spiral that is shrinking the coal industry: high fixed costs spread out over fewer customers raise consumer prices, which creates an incentive for consumers to find other solutions. In the meantime, the utilities are operating less efficiently as they struggle to adapt in an industry that can’t move as quickly as technology. Twenty year plans are difficult to engage when technology and use redefine the need with each new advance. Don’t be surprised to hear that large, less-responsive utilities find themselves in similar situations to those of today’s coal power plants.

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One thought on “Electricity Consumption Flattens

  1. Pingback: Data That Matters March 2018 | Pretending Not To Panic

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