Energy Use Down, Renewables Up
May 01, 2011 - Bill Opalka - renewablesbiz.com
Renewable energy is growing steadily even while the overall economy slumps and energy use from other sources is falling.
That’s the gist of a new report from the federal Energy Information Administration, which tracks energy use and projects future supplies. It just released a report that showed that overall use declined for consecutive years, in 2008 and 2009, for reasons outside of the energy sector, for the first time in decades.
U.S. energy consumption declined for the second year in a row in 2009, falling 4.8 percent between 2008 and 2009 to 94.6 quadrillion Btus. This follows a 2.1-percent decline between 2007 and 2008. As a result, total energy consumption in 2009 dropped to its lowest level since 1996.
This marks the third time since 1949 that energy use declined for two or more consecutive years, but the previous times were caused by the Arab oil embargoes and high prices of the 1970s and their aftereffects. The economic recession of recent years is the obvious culprit here.
“Consumption of all major fuels declined between 2008 and 2009, except for renewables. Coal dropped the most, falling 12 percent, while petroleum consumption fell nearly 5 percent, and natural gas consumption fell 2 percent. Even nuclear fuel consumption fell by nearly 1 percent.
The decline in all of these sources of energy masks the switching of coal to natural gas for electricity generation due to low natural gas prices,” the report said.
Against this backdrop, it is noteworthy that renewable energy consumption increased by 5.4 percent in 2009 to 7.8 quadrillion Btus. This follows a 9.6-percent increase between 2007 and 2008.
As reported here previously, renewables has topped 10 percent of the electric generation sector in recent years. During the time period examined in this report, overall electricity consumption dropped by 4.5 percent.
The big winner of 2009 – no surprise here – was wind with a 32-percent jump from 2008 to 2009. Wind energy grew 32 percent and has more than doubled since 2007.
“While the gain in 2009 was strong, capacity additions and output might have been greater still except for the collapse of natural gas prices, which made lower capital cost natural gas-fired capacity more attractive than wind,” the report said.
Solar’s experience is similar, with a 10-precent jump from 2008 to 2009.
But the overall shift to renewables from 2005 to 2009 is impressive. Wind has come from a relatively minor renewable energy source to accounting for nearly 10 percent of total renewable energy consumption.
Financial incentives, helped along by the economic stimulus programs and policies like renewable portfolio standards are key drivers.
Other relevant factors contributing to the electric power sector's decreased contribution to total renewable energy probably include low natural gas prices and the focus on investment in wind plants with low (about 35%) capacity factors. Nonetheless, the electric power sector still consumed the majority--53 percent--of total renewable energy in 2009.
The question for power markets to confront is if renewables’ momentum continues during the economic recovery, or if any increase in demand is mostly met by natural gas.
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