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US electricity demand likely to rise 8% to 42% by 2040: EIA

Washington (Platts)--15 Apr 2013 415 pm EDT/2015 GMT


US electricity demand will likely rise 28% by 2040, but could be as much as 42%, or as low as 8%, with average electricity prices that year ranging from 10.4 cents to 11.2 cents/kWh depending on economic growth, the US Energy Information Administration said in an analysis released Monday.

Overall, EIA projects a 0.9% growth per year, from 3,839 billion kWh in 2011 to 4,930 billion kWh in 2040. That growth remains slow, owing to increases in appliance energy-efficiency standards and increased industrial energy efficiency, EIA said in its 2013 Annual Energy Outlook.

"The growth of demand (including retail sales and direct use) has slowed in each decade since the 1950, from a 9.8% annual rate of growth from 1945 to only 0.7% per year in the first decade of the 21st century," EIA said.

EIA's wide-ranging Annual Energy Outlook, much of which was released in December, also concluded that while coal-fired generation would remain the largest source of electricity, natural gas and renewables would see the largest capacity growth through 2040. EIA intends to release more detailed aspects of its AEO over the next month.

The analysis outlines the so-called "reference case," but provides other scenarios. Those scenarios could see electricity demand growth increase 42% with high US economic growth, or 18% with low economic growth. Also, advances in energy-efficient technologies could mean growth of only 8%, EIA said.

In addition, EIA estimated under the reference case that retail electricity sales would grow 24%, to 4,608 billion kWh in 2040, and residential energy sales would increase by 24% as well, to 1,767 billion kWh, as population grows and moves to climates where air conditioning is used more often.

In the commercial sector, EIA estimates that electricity sales will be up by 27% to 1,677 billion kWh in 2040, and the industrial sector will see growth of 17%, to 1,145 kWh. As electric vehicle sales increase, EIA also projects transportation-sector electricity sales to triple, to 19 billion kWh in 2040.

--Derek Sands, derek_sands@platts.com --Edited by Jason Lindquist, jason_lindquist@platts.com




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