29 ms·

After rising for 100 years, electricity demand is flat

• Dowwie 9y ago
  Will prices fall?
  • simonsarris 9y ago
    I expect the opposite. As everyone moves to efficient light bulbs for instance, the utilities still want to make X% profit on Y revenue for Z customers, roughly, and will adjust numbers upwards until they stay at least at the same place.
    • tangent128 9y ago
      Except that increases the incentives to lower electricity usage. And even if you can't meaningfully cut your usage any further, inflating utility prices would still make a local solar installation more attractive.
      • nathan_long 9y ago
        > Except that increases the incentives to lower electricity usage. Which further raises prices, which further decreases demand... this is known as the "death spiral" for utilities.
    • Bombthecat 9y ago
      In Germany, this already starts to happening.
    • cletus 9y ago
      I suspect you're right on the money here as we've seen this before, most notably with the dying cable TV model. Declining viewership, increasing viewer age (younger viewers are more highly valued by advertisers as a general rule) and the abundance of cord-cutting streaming options (ie Netflix, Amazon Prime, Hulu, HBO, etc) are all trending in the wrong direction (for cable companies and traditional broadcast outlets). The result? Rising prices to make up for the revenue shortfalls from selling less bundles. With TV this will end badly unless something drastically changes because the rising prices will drive more and more people to cut-the-cord. I suspect as soon as you can get major sporting events in a convenient form outside of having a cable subscription it'll be game over. Utilities have significant fixed costs. These are the capex costs of building plants and power infrastructure. These don't get any cheaper if consumers consume less power. The most likely response is simply to raise prices. Solar in particular has been on a rapid decline in recent years. Utility price increases will only hasten adoption. Here's another thing to consider: electricity tends to be more expensive during the day and cheaper at night. This is because industrial and commercial usage tends to be at peak during the day. Utilities typically need to maintain a base load on their infrastructure to cover peak usage so any usage at night is "free" for them essentially, hence the subsidized cost. But consider this: in addition to residential usage of solar another response you'll see with increased utility prices is people installing batteries. This will not only store excess solar power but will allow customers to store power at night. Batteries too continue to get cheaper. I imagine that net this won't be good news for utilites either.
      • philg_jr 9y ago
        > With TV this will end badly unless something drastically changes because the rising prices will drive more and more people to cut-the-cord. I suspect as soon as you can get major sporting events in a convenient form outside of having a cable subscription it'll be game over. In the US, SlingTV offers the ability to get local Fox (NFC) and local NBC (Sunday night games) in their "Blue" package for $25/mo. You can jump up to "Orange" and get ESPN (Monday-night games) for $35/mo (but this package only allows you to run one stream to one device at a time). You do have the option to get both packages for the obvious cost, but at that point, you are coming up on the price of standard cable. SlingTV does have NFL Network, but Amazon got the rights to stream Thursday night games last season. Local CBS is still missing from Sling, so too bad if your team is in the AFC I guess. MLB (MLB.tv), NHL (NHL.tv), NBA (NBA TV) all have their "out of network" streaming services that can be purchased without a cable TV sub, but watching in-network games can typically be done with a $10/mo VPN service. In-network games for NHL/NBA/MLB are really what is left for disruption for the "big 4" US sports. But with Comcast tied NBC Sports and all of the regional channels, I suspect they will be holding on to those rights with a death grip.
        • soundwave106 9y ago
          The death knell for the cable companies will be when something challenges their virtual monopoly in high speed Internet. Considering that younger people tend to watch sports in a different manner than previous generations (more smartphone / social media oriented, according to this study -- https://www.mckinsey.com/industries/media-and-entertainment/our-insights/we-are-wrong-about-millennial-sports-fans https://www.mckinsey.com/industries/media-and-entertainment/...) I suspect that even sports is not going to be a saving grace for traditional cable. With 5G coming up and the possible promise of WISPs, fiber, satellite, or other technologies people are exploring to bring fast broadband outside cable, that death knell might be sooner than later. For power, utilities are heavily regulated by the state, which might mitigate some of this "death spiral" to some extent. But, yeah, they do have that same issue of cable companies of being heavily invested in a legacy hardware network. That being said, one counter example that comes to mind is the old copper-wire analog phone systems. In the US, most of the old Ma Bell monopoly transitioned to a more mobile oriented business (Verizon or AT&T) over time. Landlines have been on the decline for the last couple decades, but my impression is that the telephone companies were able to adapt instead of getting caught out for the most part, or trying to play legislative-bully against mobile. In contrast, the cable companies (my impression again) seem to be resisting technological trends and trying to use legislative strong-arming to sustain their business model, rather than reforming (their legal fights against muni broadband being a good example here). I do not see this as working long-term, at all. Unfortunately my impression is that the power companies are more comfortable emulating the cable companies (fighting to make solar power less viable to consumers for instance) instead of transitioning business models gracefully...
    • taoistextremist 9y ago
      In a way, this is all kind of a free market solution to energy over-use (I'm not saying this happens all the time), companies develop electronics to be more efficient so that customers will look at how much less they'll spend on electricity, so energy companies will (due to their monopolies in many parts of the world) raise prices to keep their revenues consistent, which means there's an incentive to make electronics even more efficient.
    • crdoconnor 9y ago
      >As everyone moves to efficient light bulbs for instance, the utilities still want to make X% profit on Y revenue for Z customers The logic behind this statement is mindblowing. It's like saying that because I want a ferrari, let's just assume one will appear. For what it's worth, Mr market has already priced in a significant fall in profits.
    • maxerickson 9y ago
      Residential efficiency isn't really driving the drop though. It's big users moving to on site solar and the like. Residential lighting (the residential component seeing the biggest improvements in efficiency) is about 3% or 4% of the market ( https://www.eia.gov/tools/faqs/faq.php?id=99&t=3 https://www.eia.gov/tools/faqs/faq.php?id=99&t=3 ), so even huge improvements aren't going to upend the market. Trying to raise prices on commercial and industrial users just makes alternatives that much more attractive. There's a similar effect with residential hot water and space heating, both huge components of residential usage.
    • peeters 9y ago
      This is exactly what has happened in Ontario. But a lot of that has come from boneheaded contracts that the government signed, which guaranteed payment for capacity, not usage. So the more demand falls, the more we pay per kWh, because the hydro companies are getting paid whether they actually generate power or not. The excess power is then exported for much less than what they're charging residents for it. Edit: Better in-depth look: https://www.theglobeandmail.com/news/national/why-does-electricity-cost-so-much-in-ontario/article33453270/ https://www.theglobeandmail.com/news/national/why-does-elect...
    • LgWoodenBadger 9y ago
      To reinforce this, I was reading an article (can't remember the source now, unfortunately) about Caesar's switching to solar power and having to pay the Nevada utility ~$90 million dollars to offset the "lost revenue" to the utility. Caesar's wasn't obligated to pay, but they chose to to prevent the utility from passing that cost on to the residential customers.
      • LgWoodenBadger 9y ago
        Found some sources. Closer to $50 million than $90 million, and these imply that Caesar's didn't have as much of a choice in it as in the source I first read (but can't find). https://www.reviewjournal.com/business/energy/caesars-to-pay-44-million-to-leave-nevada-power/ https://www.reviewjournal.com/business/energy/caesars-to-pay... https://lasvegassun.com/news/2017/mar/08/puc-approves-475-million-fee-for-caesars-to-leave/ https://lasvegassun.com/news/2017/mar/08/puc-approves-475-mi...
    • kerkeslager 9y ago
      Generation and transmission, at least, are auctioned to the lowest bidder through RTOs. Collusion to inflate prices is prohibited. The RTOs are the industry self-regulating, but post-Enron the industry is under a lot of scrutiny and nobody wants the government to take over regulation. The resource (electricity) is completely fungible, so providers can only compete on price. So at least at the generation/transmission levels, I think competition might actually prevent what you're predicting. It's worth noting that generation occurs in different groups based on how expensive it is to increase or lower output, which is necessary constantly because usage fluctuates cyclically: 1. Hydroelectric is cheapest to scale up and down, so there's incentive to inflate prices and wait for high-usage times, especially when water levels are low. 2. Fossil fuels are mid-price to scale up and down, so there's some incentives for inflating prices, but fuel prices are also a factor. 3. Nuclear is extremely expensive to scale up and down, so there's incentive to try to always be the lowest price. Turning off and on is sometimes more expensive than selling generation at a loss. 4. Wind/solar are cheap to scale up/down, but are weather/time dependent and therefore unpredictable and uncontrollable to an extent. You can scale down cheaply by dumping energy into the ground, but you may not be able to scale up at any cost. It should be clear from this how important hydroelectric is to our power system's pricing. Nuclear/wind/solar often result in the most competitive generation costs, but if hydroelectric goes up in cost, nuclear would have to scale generation up and down more often at great cost. When wind/sun are good, there's competition for flexibility, but when they aren't, hydroelectric controls the price of adjusting generation. So I think that if companies adjust their numbers up to maintain profits, it will mostly be hydroelectric generation. I don't understand the effects of wind/solar on the market as well, because they weren't as large a sector when I worked at an RTO. However, I am under the impression that efficient energy storage would have a large impact on allowing wind/solar to compete with hydroelectric on ability to scale up/down. And this is urgent, because the inflated cost of hydroelectric's scaling is capped at the cost of fossil-fuel scaling, which is only going up in price in the long run.
  • bryanlarsen 9y ago
    If electricity wasn't a monopoly, the answer would be an obvious yes: falling demand and falling costs both indicate falling prices. But given that it is a monopoly that is supporting huge amounts of fixed costs (infrastructure and debt payments) there will be significant pressure to increase costs. I predict that both will occur, increasing the already significant disparity between regional electricity prices.
    • rsynnott 9y ago
      This really depends on the model used for utilities. Here, for instance, transmission is a monopoly (held by the old state monopoly generator), but generation is not; generators and companies who sell electricity (who aren't necessarily the same) pay fees to the transmission monopoly, but they themselves aren't monopolies.
  • FroshKiller 9y ago
    My local electric utility just got a rate hike approved by the state utilities commission and is already pushing for another. They're putting the costs of cleaning up the 2014 coal ash spill in the Dan River on customers, the bastards. As long as utilities are permitted to make mistakes and pass the costs of cleanup on to taxpayers or their customers, they will, and bills will rise.
  • tootie 9y ago
    While demand might be slowing, it's still very inelastic. We can improve efficiency, but we absolutely can't live without lots and lots of electricity.
  • frenchman_in_ny 9y ago
    A significant proportion of utilities are regulated by states' Public Utility Commission, and the utility bring rate cases to the PUCs every so often, which set theoretically regulated rates of return on equity (which therefore in turn drives prices). So -- vastly oversimplifying -- unless the PUC targets a lower ROE, it's unlikely to see electricity prices fall.
• deleted 9y ago
  [deleted]
• rfugger 9y ago
  Maybe they could mine Bitcoin with their spare capacity.
  • gjem97 9y ago
    I'm pretty sure that you're joking, but it reminds me of the story of Microsoft (I think) running heaters in a datacenter to meet one of the technicalities of a power purchase agreement. I cant find a link right now (PR people have probably worked hard to obliterate it from the internet), but from what I recall, MS had a long-term power purchase agreement with a local utility that had both a minimum and maximum energy usage threshold for some time period. Facing contractual penalties if they did not reach the minimum, they essentially ran heaters outside the data center to use some extra energy. This was 10 years ago or so. I'd like to think that if this were today, someone would be willing to swoop in and use all that power to mine some bitcoins.
    • rfugger 9y ago
      It was tongue-in-cheek, but I wouldn't be at all surprised to see someone do it. It's a pretty obvious way to cash in on cheap power if you can get access to it.
    • deleted 9y ago
      [deleted]
  • kalleboo 9y ago
    What effect would it have on the Bitcoin difficulty algorithm if mining capacity went way up during nighttime and down during daytime? Super slow block times during the day?
• StillBored 9y ago
  And no mention of electric cars, which by themselves could more than double demand...
  • Certhas 9y ago
    At least some calculations suggest that they will balance out the efficiency savings. Electrification of the heat sector is another big unknown.
  • imglorp 9y ago
    I don't think it's as straightforward as more demand. One generation provider offers free EV charging on weekends[1], which shifts some charging to an offpeak time. Another confounder is that EV's can be used as storage devices dumping power back to the grid[2]. 1. https://www.chargepoint.com/products/home-station-incentives https://www.chargepoint.com/products/home-station-incentives 2. https://www.greentechmedia.com/articles/read/how-ev-chargers-and-energy-storage-can-make-good-grid-partners https://www.greentechmedia.com/articles/read/how-ev-chargers...
    • vidanay 9y ago
      A "free" incentive is completely orthogonal to the demand required. The electricity during that free EV charging period on weekends must still be produced and is part of the aggregate demand.
    • infogulch 9y ago
      That evens out demand, but doesn't eliminate it. That's like evening out a 20ft wave down to a tiny wide swell vs the sea itself rising 10ft. We'll still need to double base generation.
      • crdoconnor 9y ago
        Solar energy that never ends up on the grid at all could end up doing that.
  • nu-world-odor 9y ago
• CompelTechnic 9y ago
  The pricing structure that is currently baked into power bills assumes that the cost of generation is paramount, and that the cost of distribution is nothing. As distributed generation increases, regulations will have to change to reflect the fact that the cost of the distribution does not go away. I wonder what the best pricing structure is for the future.
  • selectodude 9y ago
    Literally half my bill is distribution charges.
    • martinald 9y ago
      Yes, not sure what GP is meaning here. My bill is about 30% 'standing charge' which is a daily rate you pay regardless of energy consumption, which would be for distribution costs.
    • unreal37 9y ago
      Same here. The cost of electricity and the cost of distribution are two separate charges here, and they are about the same.
  • kerkeslager 9y ago
    > The pricing structure that is currently baked into power bills assumes that the cost of generation is paramount, and that the cost of distribution is nothing. This isn't true; not only is distribution included in pricing, but there are three major components in pricing (generation, transmission, distribution) and you've completely omitted one.
    • Dylan16807 9y ago
      The difference between "transmission" and "distribution" is just an arbitrary cutoff at a certain voltage? I think it's fair to combine them, then.
      • 9y ago
• TazeTSchnitzel 9y ago
  Bad for the power companies, but good for humanity? The earth does not need more CO2 pumped into the atmosphere.
  • 52-6F-62 9y ago
    You just reminded me of some news from my home county: http://www.simcoereformer.ca/2017/11/28/coal-yard-demolition-underway-at-former-nanticoke-generating-station http://www.simcoereformer.ca/2017/11/28/coal-yard-demolition... I had friends who used to exit that place carbon-black from jobs shoveling coal. The region is partnering with the local Six Nations tribes to develop a solar farm. The stacks (skyscraper-scale) are coming down tomorrow. >The 4,000-megawatt station was built in the early-1970s. For decades, it was the largest coal-fired generating station in the world.
  • cdpolyme 9y ago
    Is it a global trend, though? Or is the energy consumption just being moved abroad?
    • icebraining 9y ago
      It's a good question, but household consumption is also dropping, and it's not clear how would that be outsourced.
  • thinkcontext 9y ago
    The grid needs new investment for decarbonization to occur. If the power companies are making less from generation we'll have to fund it through some other means.
• apo 9y ago
  I'm surprised this article doesn't mention General Electric, which has taken a series of financial hits lately due in large part to sagging demand for its power generation equipment. https://www.nytimes.com/2017/12/07/business/general-electric-power-jobs.html https://www.nytimes.com/2017/12/07/business/general-electric...
• xstartup 9y ago
  Generation is cheap. It's the distribution where the overhead is. Most of the electricity is lost in transmission. We must get wireless transmission working.
  • jeffreyrogers 9y ago
    Wireless is not going to solve anything. The lowest loss method for long distance transmission is high voltage DC.
    • quickthrower2 9y ago
      Edison, is that you?
      • jeffreyrogers 9y ago
        Ha, there used to be buildings in NYC that had DC power until relatively recently. AC is easier to work with since you can step it up and down easily, but DC has lower transmission losses over long distances.
    • dredmorbius 9y ago
      DC or AC?
      • jeffreyrogers 9y ago
        DC, but the equipment to convert from AC to DC and vice-versa is expensive so it doesn't get used as much.
        • quickthrower2 9y ago
          We convert a lot of AC back to DC to use modern appliances: Computers, Phone Chargers and LED lighting. Although I am guessing down stepping DC voltage is also expensive to do efficiently.
  • 9y ago
• martinald 9y ago
  "TVA will sell less electricity in 10 years than it did 10 years ago. That is bonkers." Why is this so crazy to imagine? There are so many drivers to increased energy efficiency. LED lightbulbs, LCD TVs instead of monitors, vastly improved efficiency standards/technologies for various appliances, fact you can do loads of stuff with a smartphone instead of watching a giant TV, etc etc, huge fall in heavy industry, small scale solar/wind generation actually appearing as a reduction in demand on the grid instead of 'increase of supply and corresponding increase in demand'. I'd actually say it was more crazy if we expected it to continue increasing thinking about current trends, and I've heard this story of the utility death spiral for about 5 years so I don't think it is a sudden problem.
  • bryanlarsen 9y ago
    But energy efficiency has been increasing at a fairly steady rate for much longer than the last 10 years. Jevons paradox(1) has previously ensured that increased efficiency resulted in increased demand. What has changed now? 1: https://en.wikipedia.org/wiki/Jevons_paradox https://en.wikipedia.org/wiki/Jevons_paradox
    • toomuchtodo 9y ago
      People are getting older, and use less resources overall as they age. Drive less as well.
      • hn_throwaway_99 9y ago
        This is interesting, especially in the areas TVA covers. Would be cool to correlate this usage by average age of the customer base.
    • amluto 9y ago
      I would guess that Jevon's paradox doesn't exist for many domestic applications. Most people have all the lights, washing machines, etc that they need. Making lights more efficient won't make people buy more of them.
• gumby 9y ago
  The term of art people in these HN comments are looking for is "Energy Intensity" -- the amount of energy required per dollar of GDP. Like many factors, it has been dropping. Here's a quick intro: https://en.wikipedia.org/wiki/Energy_intensity https://en.wikipedia.org/wiki/Energy_intensity
• mtgx 9y ago
  Do you know how utilities can ride the wave of lower demand from homes and businesses due to more people installing their own solar roofs? They could try and get ahead of EV revolution and install and own EV chargers everywhere.
  • rsynnott 9y ago
    They do this in some countries; the bulk of public electric car chargers in Ireland are owned by the old state monopoly generator, for instance.
• coolso 9y ago
  > freaking out [citation needed]
• dalbasal 9y ago
  Some demand may be levelling off. We've had energy efficiency pressures for a while, and we knew there are all sorts of low hanging fruits. This is a good thing. That said, I don't like the efficiency/austerity focused approaches to carbon reduction. Subsequently, I don't like a lot of price-based approaches to reductions like cap & trade or carbon taxes, particularly in the EU where I live. I don't like them for a few reasons: protectionism & other hijackings, price flexibility of demand, the regressive burden on poor people... But for here, I'll stick to the implications of reduced power consumption. The link between GDP & energy use is very long term. Efficiency can be an effective equivalent of volume but that can only take us so far. With lots of caveats, political perspectives and such.... I am still in favour of economic growth, technological progress... I think without exponentially increasing energy consumption we are contrained. I want a future with more transport, more computing, floating buildings, exotic new materials, space travel. These will require energy. To take an analogy from cars... The EU has put a lot of effort into energy efficient cars. Light cars with small efficient motors. Hybrids, less driving.... This can get you some reduction, lets call it 50% for the sake of argument. Once you reach that point, there are no more gains to be made. Most "experience points" we've accumulated on the way are not very useful past this point and you need to pretty much start fresh. Electric cars OTOH...These bottom out at 0. IE, when we get to the point where ICEs can be banned, we're at 0-emissions directly from car motors. Still need to deal with grid and manufacturing (probably the same ways), but vehicle emmisions is solved. Said another way, electric cars are en route to the finish line. 700cc hatchbacks are a detour. I think it's smarter to invest in the path that leads where we want to go, at least now that it has become obvious. I think most of us, particulalry those of a radical bent, are naturally dicotomous thinkers. My greeney college friends 15 years ago took the problem to be "too many people, too rich." That wasn't crazy, but I think it was essimistic. TLDR. The old equation was People X Wealth = energy consumption = emissions: I'm skeptical about disentangling wealth/gdp from energy in the long term. I'm optimistic about disentangling energy use from emmissions. I want to see the equation become become: People X Wealth = energy consumption <> emissions
  • icebraining 9y ago
    I don't get your objections. Cap&trade and carbon taxes are specifically about emissions, not about energy consumption. They seem to match exactly what your want. I don't see any movements in the EU against energy usage per se; I see a movement against pollution, and against waste of energy (which is essentially a form of pollution).
• lawlessone 9y ago
  This is great news
• MR4D 9y ago
  Lighting alone is about 19-20% of US load on a historical basis. The internet has clearly had an impact - given the timeframe of 1998 of decoupling from GDP, that almost has to be a big driver. But the unexpectedly quick move to LED lighting also has had a big impact. Just a decade ago, people were predicting much higher prices for LED bulbs. Now you can buy the bulb and the payback period is less than a year.
  • qubex 9y ago
    My firm’s factory switched to LED lighting in 20016 and, as projected, we’re already in the black. Provided MTBF rates are as expected, we’ll be in the black permanently. We’re saving up to 60% of our lighting costs (including capital expenses).
    • matt_wulfeck 9y ago
      Approximately how much were you spending on traditional versus LED lighting? Also, what’s your electricity cost? Here in the Bay Area my costs are approximately 30c kWh so energy saving are quickly and easily net positive.
      • qubex 9y ago
        I don’t think I can disclose that, but I’m in Italy so it’s probably not very comparable.
• loourr 9y ago
  Don't worry utilities, electric demand is going to double once we switch to electric cars.
  • MrRadar 9y ago
    This is one of the reasons I'm confused that the coal industry isn't pushing EVs as hard as possible. A huge surge in electricity demand from EVs is one of the few legitimate reasons I can think of to halt the trend of shutting down coal plants, at least in the short term (though coal's still screwed in the long-term as it should rightly be).
    • jartelt 9y ago
      A lot of the coal plants that have shut down were not competitive on a cost basis (i.e. they were losing money because they were selling electricity for less than it cost them to make it). Churning out more expensive power would not make them competitive again. The coal industry really should have bought all the solar/wind companies 10 years ago to stay in business! Many nuclear plant have the same problem of high fixed costs.
      • erikpukinskis 9y ago
        Wouldn’t more EVs cause prices to rise?
        • jartelt 9y ago
          More EVs certainly provides more electricity demand. Increasing demand could increase prices, but also would increase the incentive for building out more solar and wind (which have low fixed costs and now provide electricity at rates lower than coal or nuclear plants). I certainly could be wrong, but I think we would see a surge in solar/wind installations and not a big enough price increase to make coal plants competitive.
  • spenrose 9y ago
    We can be a bit more precise than that. In the US, each 1% shift in Vehicle Miles Travelled will increase electricity demand by 0.25%. This is a BFD, but even a 100% conversion to EVs would only increase demand by 25%, not 100% ("double"). I haven't done calculations for other countries. https://twitter.com/sampenrose/status/909532338647842818 https://twitter.com/sampenrose/status/909532338647842818
• lostmsu 9y ago
  This should be a kick to the shrinking heavy industry.
• falcolas 9y ago
  Don't worry about the utility companies - they're already looking for ways to monitize you even more. At ReInvent, there was actually a utility mouthpiece touting how they were interfacing with Salesforce to make more money out of you by running deep learning on everything they know about you to create proactive and individualized "sales opportunities". "Your refrigerator/TV/hot water heater seems to be inefficient. We're offering a sale on those right now..." "You appear to have a water leak. Want us to send out a technician to do a full workup?" "Hey, you seem to really like American Football. Want to buy these three premium channels that offers even more?"
  • tryitnow 9y ago
    Lol, I'll believe it when I see them execute on this strategy. Utility companies are not known for employing talented innovative thinkers, those people tend to flock to opportunities in other industries. It sounds to me like Salesforce was able to sell this utility on an a vision that the utility is unlikely to execute on.
    • jacquesm 9y ago
      > Utility companies are not known for employing talented innovative thinkers Enron ring a bell? Granted that wasn't actual innovation but you can't deny them a certain amount of creativity in the bookkeeping department.
    • CabSauce 9y ago
      #1 and #2 are already out to consumers in my local market.
    • pwg 9y ago
      > Lol, I'll believe it when I see them execute on this strategy. Some are, already, executing on some form of this strategy. My residential electricity supplier sent around letters last year to every account offering what amounted to "water pipe insurance". Mind you, this was the "electric company", offering "water pipe insurance" but the deal was that for some "low monthly payment" amount (I forget now how much) they would cover the costs of fixing a leak between the locality water meter (installed street-side) and the pipe that entered through the wall into my basement to supply the house. The letter was full of scary sounding things that /might/ happen, and of the huge sums of money a leak might cost to repair, should one occur (this figure I have some recollection of, their claim was that it was on the order of $3,000-$4,000 to repair). I read it over, scoffed at most of their scare tactics, and recycle binned the letter. But I did wonder just how many folks would ultimately sign up for the "insurance".
• mbloom1915 9y ago
  As someone who works for an investor-owned utility it is more than clear that IOUs are entering riskier markets such as solar, energy storage, EV charging stations, and wind. Utilities will either be pipes and wires companies or new-age energy solution providers to businesses and residents. Many already have the new sexy solutions making up 20%+ of their business, which just 5 years ago would of been unbelievable for the industry. This trend will continue and thus long-term winners (imo) will be the ones looking for new energy revenue models to make up the majority of their revenue. Vector (New Zealand) is a great example of this and they've done so in a short amount of time... P.S. Utilities don't necessarily make more money by providing more electricity, they often ask customers to lower consumption so the utility assets don't blow up. Utilities try to sweat assets as long as possible and that cost deferral across multiple towns, states, etc adds up to millions or billions saved per year.
  • fludlight 9y ago
    What are these "new sexy solutions"?
    • EADGBE 9y ago
      I assume renewables and nuclear. In my case, in an oft-forgot part of the country, 13% of my power is generated by solar and wind, 20%+ when you count in nuclear, too.
• erikb 9y ago
  Is it just me or is the obvious biggest problem in capitalism that you always need to have growth? It looks to me that in a naive approach I would like to build a constant profitable company that pays me rent like money that is predictable. I don't need investments that constantly grow in profits. Therefore flat demand is imo not a problem but the desired state. Finally a stable system is found.
  • wu-ikkyu 9y ago
    Growth for the sake of growth is cancer
  • mbloom1915 9y ago
    good point, utilities essentially get gov't approval to spend money and receive a return on that investment of 5-10% (depending on performance)...its a consistently profitable yet low-growth model and perhaps nothing wrong with it if not for them being investor-owned.
  • ErikVandeWater 9y ago
    Capitalism does not require fractional reserve banking. Fractional reserve banking is what causes the need for exponential growth, in general.
    • tw1010 9y ago
      How does the fact that banks hold a fraction of their assets in a central bank put pressure on companies to grow exponentially? I'm curious, I don't understand the connection.
      • deleted 9y ago
        [deleted]
      • thaumasiotes 9y ago
        > How does the fact that banks hold a fraction of their assets in a central bank put pressure on companies to grow exponentially? That is not what I would understand by the term "fractional reserve banking". Rather, fractional reserve banking refers to a system where banks do not hold enough liquid assets to cover their obligations. Central banks are completely irrelevant to the concept. The location of a bank's assets are also completely irrelevant to the concept.
• Paul-ish 9y ago
  > The die was cast around 1998, when GDP growth and electricity demand growth became "decoupled" Rather than evidence of energy efficiency, couldn't this be seen as evidence the GDP is going awry?
• jacquesm 9y ago
  Electric vehicles will change this quite a bit.
  • matt_wulfeck 9y ago
    This is true in my experience, but the load is spread a lot by good infrastructure. I rarely charge at home, for example. And many people here with EVs have at least a small solar installation that offsets a lot.
• jasonmaydie 9y ago
  Why would they freak-out when an increasing number of cars are going to be on the grid?
  • macintux 9y ago
    Future hypothetical increased demand, no matter how likely, is still future.
• drdrey 9y ago
  Electricity demand in the US, that is. Where is the global perspective?
  • spenrose 9y ago
    There isn't a"global" perspective on this, just a country-by-country perspective, because utilities are governed by national law. See Quitting Carbon for what a really aggressive attempt to transform Denmark's electric grid looks like: https://justingerdes.atavist.com/quitting-carbon?promo https://justingerdes.atavist.com/quitting-carbon?promo
  • rsynnott 9y ago
    Globally, demand is going up, dramatically. It's generally falling in advanced industrialised countries, though.
    • spenrose 9y ago
      I don't think of < 10% / year as "dramatic", but YMMV: https://yearbook.enerdata.net/electricity/electricity-domestic-consumption-data.html https://yearbook.enerdata.net/electricity/electricity-domest...
• unreal37 9y ago
  Cryptocurrency mining is about to consume more electricity than home usage in Iceland.[1] I assume it's similar in other places that have cheaper electricity. Seems that power companies should encourage consumers to mine Bitcoin. Problem solved. [1] https://qz.com/1204840/iceland-will-use-more-electricity-mining-bitcoins-than-powering-homes/ https://qz.com/1204840/iceland-will-use-more-electricity-min...
  • Tade0 9y ago
    Iceland is a nation of ~300k people, so in the grand scheme of things that's a minuscule amount.
  • westurner 9y ago
    > Seems that power companies should encourage consumers to mine Bitcoin. Problem solved. Blockchains will likely continue to generate considerable demand for electricity for the foreseeable future. Blockchain firms can locate where energy is cheapest. Currently that's in countries where energy prices go negative due to excess capacity and insufficient energy storage resources (batteries, [hemp/graphene] supercapacitors, water towers). With continued demand, energy companies can continue to invest in new clean energy generation alternatives. Unfortunately, in the current administration's proposed budget, funding for ARPA-E is cancelled and allocated to clean coal; which Canada, France, and the UK are committed to phasing out entirely by ~2030.
• jasonsync 9y ago
  The delivery, regulatory and other charges on my monthly bill are typically higher than the actual electricity charges ...
• tankerdude 9y ago
  The conversion to LED based lighting really is the only thing that crushed Jevon’s paradox. Other energy efficiency standards were incremental improvements. LED and its mass adoption was an 80% drop in energy consumption if you kept using the same amount of lighting. It’s really, really hard to spend 4-5 more on lighting. Instead of the usual 4 hours of lights, you’d have to keep them on for 16-20 just to break even. So even if you kept lights a little longer, it was still a small blip in total energy. So really, the LED really is the game changer that it was touted to be.
  • ph0rque 9y ago
    Another thing that breaks Jevon’s paradox are technologies that automate conservation. My company moved to a newly-constructed office building, and all the lights in conference rooms turn off automatically if there is no-one there. A neighbor is installing the same type of tech in his house (he's admittedly an early adopter/gadget lover, so he isn't as concerned with the payback period). I can only see this trend accelerating as the tech cost falls.
    • apexalpha 9y ago
      >A neighbor is installing the same type of tech in his house (he's admittedly an early adopter/gadget lover, so he isn't as concerned with the payback period). My parents used to apply a same kind of solution for our own house. It's called 'turn of the lights when you leave a room'.
      • deleted 9y ago
        [deleted]
  • Spooky23 9y ago
    Don’t forget the implosion of industry. We have a lot fewer big spinning things.
• matwood 9y ago
  Isn't flatting electricity demand and actually reversing it what we have all been pushing for? Utilities should have been preparing for this to happen eventually.
  • macintux 9y ago
    "I'll believe it when I see it" is a very hard mindset to overcome.
• motohagiography 9y ago
  What seemed absent from the article is the effect of flat revenue on both their ability to make bond interest payments (pay down debt used for legacy transmission infrastructure), and the potential of higher interest rates on rolling debt (like utility bonds.) Debt could make utilities catastrophically vulnerable to disruption from sustainable players and battery makers, whose business models do not need to factor in those same debt/infrastructure costs into their energy prices. Not only would it be cheaper than grid power, the utilities will have a structural pricing disadvantage because they need to incorporate their debt and increasing interest rates on older debt into their cost model. Question is, what is the "it," that forces this change? Graphene capacitors? Interesting how uber exploited a similar dynamic with taxis, where medallion debt was a significant factor in cab ride prices. It suggest debt markets might be a place to hunt for disruption opportunity, where carrying costs create a structural price disadvantage for incumbents.
  • Zigurd 9y ago
    One problem is that it is hard to capture the quality of debt: Did a company buy up competitors that turned out not to be worth the price? Did they invest in infrastructure, which seems like good debt, but nuclear reactors have turned out to be albatrosses. You see much of the same thing in telecom. In both cases the customer is at least semi-captive, and can be fleeced to pay for mistakes.
    • motohagiography 9y ago
      So straight shorting debt play, you would need that level of resolution. If you are looking to fund disruptive startups to leverage a structural pricing disadvantage that results from incumbents costing model, which has exposure to multiplying interest rates and flat revenues, the quality of the debt doesn't so much matter. I'm imagining things like, "3d print me a small refinery," or "blimp-drop me a sawmill in shipping containers," or "rent me a seed mill on a flatbed," "build me a foldable certified meat processing plant," or "create a new tractor platform with an open multi-tool interface." etc.
  • DenisM 9y ago
• overcast 9y ago
  Don't worry, cryptocurrency will pick up wasting energy for no purpose.
• turc1656 9y ago
  I was wondering why this decline in demand was so apparently devastating, since it normally wouldn't be unless a company had a very large debt load. And here's the reason: "They can’t make money selling electricity; monopoly regulations forbid it. Instead, they make money by earning a rate of return on investments in electrical power plants and infrastructure." Ah, so their entire business model is structured on ever-expanding capital investments, not the sale of the actual product. That sounds curiously like the description of a Ponzi scheme, especially considering you can't have perpetual, uninterrupted growth forever - at minimum the country has a finite amount of resources.
  • Dylan16807 9y ago
    It was tied to GDP, and GDP can grow close enough to forever. Nobody is investing in power plants based on what might happen in 500 years.
• egor598 9y ago
  Hooray! Let's release another batch of cryptocurrencies and start mining the shit out of those!
  • oceanswave 9y ago
    Even better if the investors who own the utilities do this -- they'll be potentially profiting on cryptocurrency while profiting on the infrastructure improvements needed to power the cryptocurrency mining.
• vipr340 9y ago
  Anyone here running off the grid systems entirely?
• adventured 9y ago
  Electricity prices, and the cost share of the economy, are also finally flat to declining. Competition can be a beautiful thing. "Less than four cents of every dollar of U.S. consumer spending went to gasoline, electricity and natural gas last year" [it was 50% higher in 1960; 100% higher in 1980; it's essentially the lowest cost levels in 60 plus years] https://www.bloomberg.com/gadfly/articles/2018-02-22/energy-costs-big-oil-and-power-face-new-competition https://www.bloomberg.com/gadfly/articles/2018-02-22/energy-...
• Zigurd 9y ago
  Appetites are sated and efficiency isn't driving (or, rather, enabling) demand. Populations in highly developed nations, with the most supply, are stabilizing. Materials science, telecommunication, and software are replacing part of energy as a component of GDP. Though it is hard to get around the prediction that electrifying transportation will create significant additional electricity demand.
• oceanswave 9y ago
  >But investor-owned utilities (IOUs), which administer electricity for well over half of Americans, face another imperative: to make money for investors. They can’t make money selling electricity; monopoly regulations forbid it. Instead, they make money by earning a rate of return on investments in electrical power plants and infrastructure. Wouldn't the next logical course be for IOUs to convince legislators of outdated/inefficient infrastructure, thus paving the way for infrastructure plans that provide tax benefits as well as real dollars to replace existing infrastructure. This would let the IOUs 'skim off the top' to provide profits on this upheaval for investors? Where municipalities are unconvinced that they need new infrastructure either through insufficient budget or other reasons, IOUs could convince regulators that stricter environmental limits are required, forcing municipalities to pay for the new infrastructure, usually by allowing utilities to pass that cost on to consumers by tacking on additional charges to subscribers bills. Seems like a prime environment for this to happen -- if the proper cogs were greased in this direction.
• m3kw9 9y ago
  Maybe efficiency is catching up with demand
• dc2 9y ago
  It's disheartening that this article is painted as a disaster. This is fantastic news!
• cdibona 9y ago
  So when Rio Tinto Kennecott (copper mine near slc utah) had to suspend operations a few years back following a slide, the pollution reduction and the power consumption of the whole area was impacted (positively, in my mind). TVA provides power to a huge number of industrial operations like kennecott and with a reduction of strip mining operations (We don't mine coal anything like we did even twenty years ago) and the increase in renewables, insulation and smarter construction, I don't see why the TVA considers it bonkers, and that was really the article editorializing. If anything, we (computer industry) should be building more data centers in TVA serviced areas. Not speaking for google here, but if you search for "TVA and Google" there's some interesting links..
• teilo 9y ago
  It will be interesting to watch this in light of the increase in electric transportation. If we were 100% electric, our energy grid in its current state would not be able to handle the load. If electric transportation sees exponential growth, I question whether current trends in renewable will be able to scale sufficiently to meet the demand, and suspect that an expansion of centralized production will be inevitable.
  • esturk 9y ago
    Nothing is ever going to jump from 1% to 100% in the scale we're talking about aside from being just talking points. What's likely going to happen is the production will change slowly to meet the demand. But it's not clear if other areas will use even less electricity than now. All you've pointed out is take the current situation and swap all gas card to electric. Of course things won't work that way.
    • teilo 9y ago
      No, that is not "all I've pointed out." I specifically addressed the change in production. My point is that I doubt renewable will scale sufficiently, and that tradition modes of production will likely see an expansion. That there will be an expansion (renewable or otherwise) to meet the coming demand is beyond question. The current power excess is a temporary situation. The eventual (and IMO inevitable) conversion of petroleum-based transportation to electric will require more capacity than our grid can presently provide.
• kragen 9y ago
  As I've argued here previously (https://news.ycombinator.com/item?id=16209310 https://news.ycombinator.com/item?id=16209310) the plunging prices of photovoltaic panels will result in plunging energy prices, starting in the early 2020s. (They're already exerting some downward pressure, but so far it's only in limited areas and for marginal capacity.) Perhaps in Tennessee these plunging prices will not result in increased demand, due to poor planning and institutional inflexibility, but in many places in the world they will. So the statement, "TVA will sell less electricity in 10 years than it did 10 years ago," seems very dubious. It's predicated on electricity generation continuing to cost the same as it has for the last half-century or so, modulo minor improvements. But at this moment we are seeing the beginning of a dramatic disruption in those prices. So this is a pretty bad way to make that prediction. It seems a lot more likely that the plateau in electrical energy demand in the US from 2005–2025 or so will turn out to be temporary, not a "new normal".
  • adamsea 9y ago
    The article doesn't go into details about the causes of the drop in demand, but it does say that ... > "Thanks to a combination of greater energy efficiency, outsourcing of heavy industry, and customers generating their own power on site, demand for utility power has been flat for 10 years, and most forecasts expect it to stay that way." So the drop in demand may be being driven by things other than cost, meaning that a continued decrease in cost may not result in increased demand.
    • kragen 9y ago
      The drop in demand is certainly driven by things other than the cost of energy, because energy has gotten mildly cheaper over the last ten years, during which time the demand has stayed the same. You could argue that those factors, whether they're outsourcing of heavy industry or whatever, will prove stronger than the dramatic decreases in energy prices brought by photovoltaics. But that doesn't seem very likely, because photovoltaics are dropping in price about 30% per year, while whatever forces are limiting demand for electrical energy seem to have been just sufficient to keep energy demand increase down to 1% during 2006-2016 (the last ten years on the graph), almost exactly counterbalancing a 14% increase in GDP over the same period. That is, they're pushing down electrical energy demand by about 1.3% per year. So if the long-term price elasticity of energy demand is somewhere in the neighborhood of -0.8, which seems like a reasonable guess based on a cursory glance at the econometrics research, we would expect energy demand to grow by about 25% per year once photovoltaics are the marginal source of energy — or 24% if whatever mysterious anti-growth figures this article is about continue to operate in the same way. Now, you could argue that maybe the elasticity isn't -0.8. Maybe it's -0.2 or -1.2. But to suppose that a sudden and sustained 30% yearly drop in the price of energy would be wholly counterbalanced by whatever has held energy consumption constant over the last ten years requires the wholly implausible assumption that the absolute value of the elasticity is smaller than about 0.05. You might argue that photovoltaic modules aren't really dropping in prices 30% per year. The old page at https://www.solarserver.com/service/pvx-spot-market-price-index-solar-pv-modules.html https://www.solarserver.com/service/pvx-spot-market-price-in... shows the historical price history from PVXchange from May 2009 (€2.62/Wp in Europe) to May 2017 (€0.45/Wp in Europe), and PVXchange's current prices http://www.pvxchange.com/priceindex/default.aspx?template_id=1&langTag=de-DE http://www.pvxchange.com/priceindex/default.aspx?template_id... are €0.37/Wp in Europe in the "mainstream" division. Averaged over 8 years and 7 months, that's a 1.88% price drop per month, which works out to 20% per year (not 23%, as you might think). But much of that 20% was in the 2013–2015 price plateau, during which time the prices remained almost unchanged, and which seems to be over. Now, shipping volumes are way up, and so we should move much more rapidly down the learning curve. So 30% is, if not an open-and-shut prediction, at least a plausible one. We aren't seeing these demand-stimulation effects yet because, although photovoltaics' growth and price reduction is exponential and rapid, they're still only a tiny percentage of the overall marketed energy supply, and we don't have grid-scale storage online yet. That's why it will take until the early 2020s for these effects to become dominant — maybe even later in the US.
• iUsedToCode 9y ago
  I think demand is far greater than what is currently visible, but the price is still way to high. I'd move to electric heat in a heartbeat, but it's 2-3 times more expensive than coal, natural gas or oil (those are the most popular choices in Poland). If the price was 1/3rd of current, tens of percent of all citizens would move to a different heat source, using a lot more energy than they do now. So it's just a price problem. Make it cheaper (maybe renewables will) and the demand will come quickly.
  • oconnore 9y ago
    Electric heat in the form of heat pumps is fairly competitive (certainly not 2-3x). You are correct that running an electric current through a resistive wire is not an economical solution.
    • mmphosis 9y ago
      Look for the most efficient heat pump. As I understand, the co-efficient of our heat pump is 2. (Geo-thermal is 4.) Electric heat is 100% efficient, wood up to 75%, gas heat up to 70%.
      • oconnore 9y ago
        Right, a coefficient of performance (COP) of 1 is equal to 100% efficiency. A heat pump typically exceeds that, so your COP 2 heat pump is 200% efficient (useful heat divided by work required). If an electrical joule cost the same as a natural gas joule, the heat pump would definitely be more economical; but in real life it's not so straightforward.
        • mnw21cam 9y ago
          If you're running your electric heating from a natural gas-fuelled power station, which has an efficiency somewhere along the lines of 40% (if you're lucky), then using a heat pump with a COP of 2 means you are heating your home with 80% efficiency. Modern gas central heating systems can be >90% efficient. Alternatively, if you go by the relative price of electricity compared to natural gas, typically electricity has three times the price for the same amount of energy. In that case, you would need a heat pump with a COP of >2.7 to make heating cheaper than using a gas burner. Such heat pumps do exist now. The benefit is that if/when the electricity grid transitions to renewables, you are sorted.
• deleted 9y ago
  [deleted]
• zukzuk 9y ago
  How is it that the Jevons paradox (https://en.wikipedia.org/wiki/Jevons_paradox https://en.wikipedia.org/wiki/Jevons_paradox) hasn't been mentioned even once in this thread.
  • frgtpsswrdlame 9y ago
    it has https://news.ycombinator.com/item?id=16474076 https://news.ycombinator.com/item?id=16474076
• strictnein 9y ago
  Strange article. It's been flat for over 10 years, per the first graph they show.
• dbcooper 9y ago
  The graph has no units. How has demand for electrical energy (kilowatt hours) changed?
• maerF0x0 9y ago
  Of course local electricity usage is falling. We import more than ever. Electricity (and other forms of energy) are being consumed elsewhere and then shipped to us.
• jedberg 9y ago
  This will hurt the poor terribly. As those utility companies keep making less profits, the service they do provide will get worse and worse, and the only people who will be relying on those services will be people who can't afford their own solar panels and batteries. The utility companies are already calling this out as an issue. As their rich (and more consuming) customers go solar, they are having a harder time providing service for their poor customers. Their fixed costs are getting split amongst an ever shrinking group of people, meaning the rates for those who can least afford it will keep going up. This is why most utilities push for laws that force people with solar to continue paying into the utility system.
  • jimmy1 9y ago
    This is one of the fundamental problems with our model of capitalism (which is based upon money that can be created out of thin air): demand, want, need, greed all must go up for it to work. Everything has to inflate, whether it is natural or artificially. (Not advocating for the gold standard -- but something must change)
  • oldcynic 9y ago
    This is just the sort of problem government and legislation is for. We have universal service obligations on the mail, and we should do so for utilities.
  • wetpaws 9y ago
    How is electricity is different from water or sewers?
    • jedberg 9y ago
      It isn't, but there isn't a huge trend in digging wells and dropping septic tanks in places that offer those services. I wouldn't save a lot of money doing those things, but I'll save a ton of money getting solar panels.
  • narrator 9y ago
    As electricity usage falls they can just mothball old plants that require more maintenance. This should lower their fixed costs.
• age_bronze 9y ago
  Funny when you hear this and then you hear all the complaints from people who think cryptocurrencies waste energy. It's almost as if there's always someone who will look at one half of the picture that is pessimistic for him.
• Reason077 9y ago
  Flat demand? In the UK, electricity demand has been falling for more than a decade, despite significant population growth and GDP growth.
• pfarnsworth 9y ago
  What will happen is that electricity prices will RISE, because these bloated utility companies need to maintain their revenues. This will hasten people to move to solar, etc, and then cause electricity usage to drop even further. It's a spiral downwards, and they don't have the means to disrupt themselves.
• Caveman_Coder 9y ago
  That is why it will be better to be a transmission line owner (or vertically integrated) instead of just a generation owner/operator, since everything will be going to an energy market anyway.
• gwbas1c 9y ago
  "Instead, utilities find themselves constantly surprised, caught flat-footed again and again by a trend they desperately want to believe is temporary." Electricity demand will go back up, especially as renewables drive the price down. In MA, when you own your own solar panels, running a space heater costs about as much as using a natural gas heater. Furthermore, because renewable energy is primarily electric, I suspect that a lot of energy usage from fossil fuels will switch to grid electric. So yeah, IMO, demand will come back. It's just that electricity will need to be extremely cheap, about 10-30% of current prices.
• crb002 9y ago
  LED lights and electric furnaces going out of vogue. Electric vehicles, end of Moore's law means CPU racks giving off waste heat will hold value long enough to invest in them.
• pmarreck 9y ago
  Not for long... Electric vehicles are coming. This is the calm before the storm
• ant6n 9y ago
  This is how to achieve sustainability: increased productivity, decoupled from an increase in resource consumption. We need this for other resources as well (e.g. transportation).
• tim333 9y ago
  Related - we seem to have passed peak stuff - “Britons, too, have reached Peak Stuff, having reduced the annual use of material from 15.1 metric tons per person in 2001 to 10.3 metric tons in 2013.” It's all quite good for the environment and the like.
• fastbeef 9y ago
  It always baffles me to see how the rest of the world seems oblivious to modern heat pumps. They come in a variety of medium (air-air, air-water, geothermal-water). Seeing how heating a house is the biggest energy expenditure it should be a no-brained to heat homes with heat pumps. To give a concrete example, In Northern Sweden, above the Arctic line, a modern geothermal heat pump an warm a 200 m2 (~2000 sq feet) house for a year, including warm water, for 15000kWh. Using gas, the need would be 4x higher. Even if you use electricy made from coal, you’re still coming out ahead.
• mbostleman 9y ago
  "...we want overall demand to decline. It saves money, reduces pollution, and avoids the need for expensive infrastructure. But the way we’ve set up utilities, they must fight that trend. Every time they are forced to invest in energy efficiency...demand for their product declines, and with it their justification to make new investments." Isn't this true for any government activity? Government builds institutions around solving some problem. But since when does an institution want to sunset itself because the problem is solved.
• ilkan 9y ago
  Was this measured before the Bitcoin surge?