An Update On Trends In US Primary Energy, Electricity, And Inflation-Adjusted GDP Through 2019
Back in 2015, Professor Richard Hirsh (Virginia Tech) and I published the following article in The Electricity Journal, documenting trends in US primary energy, electricity, and real (inflation-adjusted) Gross Domestic Product (GDP) through 2014:
Hirsh, Richard F., and Jonathan G. Koomey. 2015. “Electricity Consumption and Economic Growth: A New Relationship with Significant Consequences?” The Electricity Journal. vol. 28, no. 9. November. pp. 72-84. [http://www.sciencedirect.com/science/article/pii/S1040619015002067]
Every year since, my colleage Zach Schmidt and I have updated the trend numbers for the US using the latest energy and electricity data from the US Energy Information Administration (EIA). This short blog post gives the three key graphs from that study updated to 2019, and makes a few observations.
Figure 1 shows GDP, primary energy, and electricity consumption through 2019, expressed as an index with 1973 values equaling 1.0. From 2017 to 2018, GDP grew a little more slowly and primary energy and electricity grew a little more rapidly than in recent years, but primary energy and electricity consumption both dropped in 2019 relative to the year before. GDP continued to show modest growth consistent with recent historical rates (all bets are off for 2020, though, given the likely effects of COVID-19).
The overall picture really hasn’t changed that much. Electricity consumption and primary energy consumption have been flat for about a decade and two decades (respectively).
Figure 2 shows the ratio of primary energy and electricity consumption to GDP, normalized to 1973 = 1.0. The trends there are pretty clear as well. Primary energy use per unit of GDP has been declining since the early 1970s, while the ratio of electricity use to GDP has been declining since the mid-1990s. Before the 1970s, electricity intensity of economic activity was increasing, and from the early 1970s to the mid-1990s, it was roughly constant.
Figure 3 (which was Figure 4 in the Hirsh and Koomey article) shows the annual change in electricity consumption going back to 1950. Growth in total US electricity consumption has just about stopped in the past decade, but there’s significant year-to-year variation. The decline in 2019 electricity use almost offset the growth from 2017 to 2018 (and this decline predates the effects of COVID-19 on economic activity).
Flat or declining consumption poses big challenges to utilities, whose business models depend on continued growth to increase profits (unless they are in states like California, where the regulators have decoupled electricity use from profits). If the US embarks on a sustained effort to #electrifyeverything, then these trends can be reversed, but that will take time, and in the meantime, the long running efforts on efficiency standards and labeling continue to have substantial effects on electricity consumption in developed nations.
Email me at jon@koomey.com if you’d like a copy of the 2015 article or the latest spreadsheet with graphs. If you want to use these graphs, you are free to do so as long as you don’t change the data and you credit the work as follows:
This graph is an updated version of one that appeared in Hirsh and Koomey (2015), using data from the US Energy Information Administration and the US Bureau of Economic Analysis.
Hirsh, Richard F., and Jonathan G. Koomey. 2015. “Electricity Consumption and Economic Growth: A New Relationship with Significant Consequences?“ The Electricity Journal. vol. 28, no. 9. November. pp. 72-84. [http://www.sciencedirect.com/science/article/pii/S1040619015002067]
