For more than a century after the advent of commercial electrical power in the late 1800s, electricity use in the U.S. rose and rose and rose. Sure, there were pauses during recessions, but the general trajectory was up, until 2007.
An initial drop in electricity use in 2008 and 2009 could be attributed partly to the economic downturn. But the economy grew again in 2010, and every year since. Electricity use in the U.S., meanwhile, is still below its 2007 level, and seemingly flatlining.
Per capita electricity use has fallen for six years in a row. We’re now back to the levels of the mid-1990s, and seemingly headed lower.
This is a really big deal! For one thing, it’s yet another explanation – along with tighter federal emissions rules, the natural gas fracking boom, and the rise of solar and wind power – for why the past few years have been so tough on coal miners. It means that even a big pro-coal policy shift from Washington may not result in higher demand for thermal coal.
For another, it seems to settle a turn-of-the-millennium debate about the electricity demands of the digital economy. Businessman and technology analyst Mark P. Mills, now a senior fellow at the right-leaning Manhattan Institute, kicked things off in 1999 with a report stating that computers and the internet were already responsible for 13 percent of U.S. electricity demand and would be consuming 30 percent to 50 percent within two decades.
A group of scientists at Lawrence Berkeley National Laboratory who studied energy use were dubious of these claims, and published a series of reports calling them into question. One 2003 paper concluded that direct power use by computers and other office and network equipment accounted for just 2 percent of electricity consumption in 1999 – 3 percent if you counted the energy used in manufacturing them.
Since then, the digital takeover of the economy has continued apace. But it hasn’t translated into an explosion in electricity demand.
Part of the reason is that a grim new economic era dawned in 2000 or 2001 that has been characterized by slow growth, declining labor-force participation and general malaise – all of which tend to depress energy demand. But if you measure electricity use per dollar of real gross domestic product, the decline is just as pronounced, and it began much earlier than the fall in per capita demand.
In an article published in the Electricity Journal in 2015, former Lawrence Berkeley energy researcher Jonathan G. Koomey, now a consultant and a lecturer at Stanford, and Virginia Tech historian of science Richard F. Hirsh offered five hypotheses for why electricity demand had decoupled from economic growth:
n State and federal efficiency standards for buildings and appliances have enabled us to get by with less electricity.
n Increased use of information and communications technologies have also allowed people to conduct business and communicate more efficiently.
n Higher prices for electricity in some areas have depressed its use.
n Structural changes in the economy have reduced demand.
n Electricity use is being underestimated because of the lack of reliable data on how much energy is being produced by rooftop solar panels.
The Energy Information Administration actually started estimating power generation from small-scale solar installations at the end of 2015, after Koomey and Hirsh’s paper came out, and found that it accounted for only about 1 percent of U.S. electricity. That estimate could be off, and there’s surely room for more study, but mismeasurement of solar generation doesn’t seem to be the main explanation here.
Which leaves, mostly, the possibility that life in the U.S. is changing in ways that allow us to get by with less electricity. Most other developed countries have experienced a plateauing or decline in electricity use similar to that in the U.S. over the past decade.
So, is electricity use in the developed world fated to decline for years to come? Well, not exactly fated. If the shift to electric vehicles ever picks up real momentum, that’s going to start growing, and fast.
Justin Fox is a Bloomberg View columnist.
