The folks who install insulated windows, efficient factory motors and energy saving lights apparently missed the memo about the economic meltdown.
As US gross domestic product slipped to under 1% in 2008, the $4.1 billion energy service industry grew 7%. Jealous? Just wait. That was nothing compared to the expansion predicted over the next couple of years, according to a new report by the Lawrence Berkeley National Laboratory.
A political consultant once told me that Americans only vote for the environmental candidate if the economy is thriving. The nation’s financial house needs to be in order before voters will tend the garden.
Green energy advocates appear to have circumvented this tendency in recent years by promoting green jobs. The political formula is no longer the environment or the economy, but the environment and the economy.
But the strength of that link may soon be tested.
The Deloitte Center for Energy Solutions published a recent survey that found 85% of utility regulators expect electricity rates to rise this year, and they worry that consumers will revolt.
What you don’t know will hurt you. That’s the message in Michael Lewis’ new book, “The Big Short,” which traces today’s worldwide economic downturn to a single problem: the secretive nature of prices in the subprime mortgage bond markets.
What’s this got to do with energy? Our industry has its own opaque corners that can cause widespread damage. This week the International Energy Agency (IEA) is attempting to focus light on a big one: energy subsides for fossil fuels.
We’ve been hearing a lot about a drop in energy consumption as a result of the economic downturn. In fact, U.S. energy use per person declined last year to its lowest level since 1968.
Economic activity and energy use are directly linked. But lately, several reports have noted that the economic slowdown is not the only reason energy consumption is falling. Aggressive energy efficiency efforts also have impact.
That impact will be “major” in the years to come, according to the Energy Information Administration, the chief energy data collector for the U.S. government. The agency this week released its “Annual Energy Outlook 2010” with projections to 2035.
The federal report shows us decreasing energy use significantly if we employ best available efficiency technologies over the next 25 years – that is if we buy the most energy efficient appliances and build homes to the highest efficiency standards. Under this scenario, energy consumption could drop by as much as 27 percent. But if we stick to the status quo, homeowners will increase energy use by about 0.2 percent.
Carbon dioxide emissions dropped significantly in the United States in 2009. The economy played an obvious role; not so obvious was the influence of power generation and its increasing efficiency.
Emissions of CO2 have been trending down for the last decade by about 0.9 percent. But the 2009 drop was far more dramatic — seven percent — the largest decline since the Energy Information Administration began keeping energy data more than 60 years ago.
This tells us a lot about just how bad economic conditions were (As if we needed to be told!).
The energy world operates under the premise that more is better. If we build more power plants, we’ll have ample supply, and electricity prices will drop. Even better, if those plants are clean and green, we’ll displace older, dirtier plants and reduce emissions. That will help our economy by producing jobs.
But is that the right way to think about power?
Truth be told, new energy sources are likely to play a smaller role in economic recovery than advances in energy efficiency, according to speakers at a recent symposium held by the American Council for an Energy Efficient Economy, as part of its 30th anniversary celebration.
“Cost-effective investment that can reduce the amount of energy necessary to support a dollar of economic activity is the single most important driver of economic productivity within the United States and around the world,” said John A. “Skip” Laitner, director of economic and social analysis, American Council for an Energy-Efficient Economy.
Is efficiency worth the bother if you save only $5 to $10 per month on your energy bill? Many homeowners think not. One dad told us his family would rather save money by just skipping a pizza order once a month. That sentiment is not unusual.
But it is hard to negate the economic value of efficiency if you spend $20 billion per year on energy, as does the U.S. military, our government’s largest energy user, responsible for nearly 80 percent of the government’s total energy consumption.
“Re-energizing America’s Defense,” a recent report by The Pew Project on National Security, Energy and Climate, looks at how profoundly our energy mix affects the military.
The military has great motivation to make our energy supply more efficient and less oil-dependent. For every $10 per barrel increase in oil prices, the Defense Department’s energy bill increases more than $1.3 billion. That is a lot of pizza.
For consumers, discussion of electric cars tends to focus on how long the vehicle travels before needing a recharge and what it will cost to buy. But a new report backed by several large corporations takes a broader view of what the electric car will mean to our overall finances.
And the news is good.
Fueling our cars with electricity instead of gasoline – this one change – could avert a lot of economic pain, according to the “Economic Impact of the Electrification Roadmap” report by the Electrification Council.
As John McDonald tells it, smart grid needs GOLD. And he’s not talking money. GOLD stands for Graduates of the Last Decade, the technology savvy, risk-taking engineers and technicians who may be among the greatest benefactors of the new smart grid movement. While most recent college graduates face dismal employment prospects, for the GOLD kids, the job market is, well, golden.
“I’ve never seen electric utilities and suppliers outbidding each other for a bachelor’s degree,” said McDonald, who has had 35 years in the energy business and now serves as an IEEE Fellow and general manager of marketing for GE Energy T&D.