Changes in Electricity Demand Historical, Current, Future

Transcription

1 Changes in Electricity Demand Historical, Current, Future George Given October 28, 2009 LSU Center for Energy Studies Annual Energy Summit

2 Agenda Introduction ti Electric Power Demand Growth Recent Demand Destruction Future Electricity Demand Drivers International Experience and the Future 2

3 Historical U.S. Power Sales Growth Retail Electricity Sales TWh 4000 Recession Period 3500 Industrial 3000 Commercial 2500 Residential

4 Hourly Power Load Shapes Vary by Month 60,000 50,000 ERCOT Load Shapes Jan Mar July MW 40,000 30,000 20, Hour of Day 4

5 Sources of U.S. Power Demand Growth GDP Drives electricity consumption, but only partially Population Growth, Air Conditioning Penetration, etc Electric Intensity per $GDP history can be subdivided into separate phases: - rising first, hitting a plateau and then declining over the past 15 years some of the rise was caused by rural electrification 2 Transition from manufacturing economy to services causing the decline now New Technologies and more of them that use power (2005 $ GD DP) 1949 = Real GDP 1949= Electricity Intensity Per Unit of GDP

6 The Recession s Impact on Industrial Production Manufacturing crash Global synchronized recession Are we now in a recovery yphase? V, U, or W U.S. Industrial Production (through Aug 09) All Manufacturing Basic Chemical Primary Metal In ndustria Prod duction (Y-o- -Y Growth) 10% 0% -10% -20% -30% -40% -50% Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 6

7 Recession Effect on Power Consumption The effect on recent power demand has been severe. Industrial sales are down by as much as 20% in Q1 and Q2 in several markets Signs of a contraction were actually evident in 2008 a potential leading indicator (%) 10% 5% 0% -5% -10% -15% -20% -25% Industrial Sales Growth (Quarterly Change) Q1 Q2 Q3 Q4 Q1 Q2 '08 '08 '08 '08 '09 '09 Allegheny Duke Carolinas Duke Midwest PG&E 7

8 Future Electricity Demand Drivers Other Disruptive Technologies Smart Grid & Regulatory Decoupling Phantom Load / Energy Vampires Distributed Generation Energy Efficiency PHEV 8

9 Possible Smart Grid Potential Impact on: Electricity Fundamentals Hourly Load Shape Monthly Load Shape Hourly Load (MW W) Hour of Day Electric Intensity of GDP % 15% 10% 5% 0% Jan Feb Mar Apr May Jun Jul Reserve Margin Requirement (%) Aug Sep Oct Nov Dec 9

10 Historical Energy Efficiency (EE) Total Incremental Energy Efficiency Total Annual Energy Efficiency 2007 Incremental Savings as a % of sales 3.0% 2.5% 2.0% 1.5% 1.0% TWh Saved % % Sout outhern California Edison Co Pacific Gas & Electric Co Northern States Power Co Florida Power & Light Comp mpany Connecticut Light & Power Co Massachusetts Electric Co PacifiC ficorp Puget Sound Energy Inc Potomac Electric Power Co Inte terstate Power and Light Co Sacr acramento Municipal Util Dist Wisconsin Power & Light Co Great River Energy Florida Power rcorp Austin Energy Total annual energy efficiency represents the cumulative total effect of past and current programs. California programs have had the most impact both for 2007 and cumulatively. Source: EIA

11 What is the Potential Future for U.S. Energy Efficiency? Study projects the most potential for power in the residential and commercial sectors Potential TWH saved were based on programs that were NPV positive (economic for their own sake) Barriers to over come: 1 substantial up front cost to be amortized over a long period 2 high number of fragmented sites requiring new investment 3 utility and regulator willingness to uncouple rates from sales (disconnect sales and earning) TWh Sa ales BAU EE Total Savings 1090 TWh Results: 2020 EE Case sees a reduction from 2008 consumption by 700 TWh or 1090 TWh from the BAU case 0 Residential Commercial Industrial Total Source: Unlocking Energy Efficiency in the U.S. Economy, McKinsey July

12 Will Plug-in Hybrid Electric Vehicles (PHEV) Drive Demand? Assumptions Initial PHEV sales growth rate is 4% p.a. of total LDV fleet - 65m vehicles by 2025 PHEV-40 vehicle (200 trips per Year) Ten year life cycle Efficiency Assumption range: miles/kwh Results U.S. Consumption in 2008: 4000 TWh PHEV Consumption in 2025: TWh (2.5% - 4% of 2008 U.S. Sales) Significant uncertainty in changes to load shape More off peak consumption = more coal and CO2 Dema and (MW) PHEV Sales % (of 2008) 4.5% Higher Efficiency 4.0% Lower Efficiency 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% Changing Load shape Uplift in off-peak demand from No PHEV With PHEV Hour of Day 12

13 Phantom Load and Energy Vampires : Do these completely offset energy efficiency gains? Phantom Load represents electricity usage by appliances when they are turned off consumed during standby mode. Many studies and sources claim that as much as 20% of residential electricity load is due to this. Wide range of estimates, but watch the baseline measure being compared to: 75% of the electricity used to power home electronics is consumed while the products are turned off. USDOE Percent of Total Sales EU Study % UK Energy Review % US Energystar.gov (CES 2009) 2.5% Another Big Uncertainty: how much could this change in the future? Much more work needs to be done here 13

14 Recap: Changes in Future electricity demand: relative importance GDP In ncrease in Co onsumption n Decrease in Consumpt tion PL? PHEV FDT SG FDT - Future Disruptive Technologies EE - Energy Efficiency? EE Increasing Importance GDP - Gross Domestic Product PHEV - Plug-in Hybrid Elec. Vehicles PL - Phantom Load ECON SG - Smart Grid ECON Structural Economic Changes 14

15 International Power Consumption: First Half 2009 Broadly speaking, Q1 and Q2 electricity sales were disproportionately 8% driven by massive contractions in 6% manufacturing and industrial sales. tricity r year nge in Elec (year over 4% 2% 0% In Japan, industrial power sales were -2% down 21% in Q1 and 18% in Q2-4% -6% -8% iti -10% -12% Results from India were strongly positive China data was from official reports (more recent data is not available) ercent Chan onsumption Pe Co China Ger rmany Italy Total Power Consumption Q1 '09 Q2 '09 Ma alaysia Russia Tha hailand UK South Africa India Brazil Japan 15

16 Projections in Power Production (proxy for Consumption) in Selected Countries Growth Rates 2008 = 1 Coal Share grows from: 47% to 55% through 2025, mainly due to China 008=1 Electricity Production Brazil China Germany India Japan Mexico Russia Saudi Arabia Turkey United Kingdom United States Source: Wood Mackenzie Energy Markets 25,000 20,000 15,000 10, ,000 - TWh Coal Hydro Oil Other Solid Fuels Gas Nuclear Other Renewables 16

17 Total World Electricity Production (proxy for Consumption) Total generation growth expected to slow to 2.2% through 2030 down from 3.2% since 1980 Non-OECD growth rate is triple the OECD Non-OECD generation to overtake OECD by 2014 and reach: 18,560 TWh by 2030 TWh To otal Generatio on 35,000 30,000 25,000 20,000 15,000 10,000 5,000 OECD Non-OECD Asia - Non-OECD Middle East Non-OECD Europe and Eurasia Non-OECD Central and South America Non-OECD Africa Non-OECD Middle East Non-OECD Asia OECD Non-OECD Africa Historical Non-OECD Central and South America EIA Forecast Non-OECD Europe and Eurasia Non- OECD Total World Total Total Growth 1.8% 6.3% 5.1% 3.4% 3.3% 1.0% 4.0% 2.8% % 2.3% 82% 8.2% 74% 7.4% 40% 4.0% 44% 4.4% 05% 0.5% 46% 4.6% 32% 3.2% % 3.9% 2.2% 2.5% 2.0% 1.8% 3.2% 2.2% 17

18 Conclusions Never been a more interesting time to forecast electricity demand New technologies are both increasing and decreasing demand Competing forces: pushing demand d higher h and lower Future structural changes in economy will impact demand growth and load shape but these are uncertain Unprecedented worldwide decline shows the magnitude of the recession Industrial load hardest hit Latest data indicates the worst is over(?) Beyond the recession: electricity consumption expected to grow especially in non-oecd countries (rate of over 3%) But both OECD and Non-OECD growth is projected to be lower than in the previous 25 years 18

19 Contacts George Given leads Wood Mackenzie s Global Power Research practice. Mr. Given has over 15 years of experience serving electric power, natural gas, oil, and coal companies. His current focus is managing and developing the strategic direction of power research across Wood Mackenzie s global operations. As a power and fuels market consultant, Mr. Given has advised financial institutions, utilities, independent power producers, and integrated energy companies on investment opportunities and risk factors, provided independent market opinions (lenders reports) in nearly 100 asset transactions, and provided strategic analysis of energy market trends across North America, Europe and Asia using fundamental-based, integrated energy-environmental modeling techniques. George Given Head of Global Power Research T: E: george.given@woodmac.com 19

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