
After rising for 100 years, electricity demand is flat - aaronbrethorst
https://www.vox.com/energy-and-environment/2018/2/27/17052488/electricity-demand-utilities?utm_campaign=drvox&utm_content=chorus&utm_medium=social&utm_source=twitter
======
martinald
"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
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)

~~~
amluto
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.

~~~
moccachino
I would argue LED lighting does increase the demand for all sorts of lights
rather a lot. It is due to increased efficiency, but that is not directly what
creates the demand. The increased efficiency means light bulbs are no longer a
fire hazard, allowing lights to be strewn just about anywhere and left on
indefinitely.

~~~
CJefferson
Electricity is not the only cost -- LED light bulbs are quite expensive, which
puts a natural limit on how many I want to fit in my house.

~~~
skrap
I'm gonna have to call you on that one. Even high-end brand LED bulbs are so
much more cost efficient than incandescent bulbs, it's the rational act to
immediately replace nearly every single incandescent.

Whether you're interested in saving energy or saving money, you should remove
and smash your incandescents.

Here's a blog entry I wrote with some of the simple math:
[https://blog.sense.com/articles/smash-incandescent-bulb-
swit...](https://blog.sense.com/articles/smash-incandescent-bulb-switch-led/)

~~~
azeotropic
Where do you find 100 watt equivalent LED bulbs in 2700K for $1/bulb?

~~~
lodi
You won't find LED's for $1/bulb, but the total cost of ownership over X years
is massively in favor of the LED.

Also I simply find it convenient that LED's just. don't. die. I haven't had to
change a single bulb since I upgraded ~4 years ago.

~~~
tbyehl
I had one out of around 50 die over ~3 years, which I'm sure is much better
than I experienced with incandescents and CFLs.

Smart bulbs are so cheap now that I've obsoleted nearly all of my "dumb" LEDs.

~~~
user5994461
Note that the lifetime of a bulb is quadratic, if not exponential, with its
wattage.

The 100W bulb always lit in the living room will last 6 months but a 30W will
do a decade.

------
erikb
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.

~~~
ErikVandeWater
Capitalism does not require fractional reserve banking. Fractional reserve
banking is what causes the need for exponential growth, in general.

~~~
tw1010
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.

~~~
thaumasiotes
> 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.

------
motohagiography
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
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
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.

------
tankerdude
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
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
>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'.

------
apo
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...](https://www.nytimes.com/2017/12/07/business/general-electric-
power-jobs.html)

------
turc1656
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
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.

------
falcolas
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
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.

~~~
pwg
> 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".

~~~
callalex
The reason that pipe is particularly dangerous is because it is before your
house pressure regulator (so it is at mains pressure) but you are still
responsible for it. In addition, it is the most prone to failure as your house
settles independently of the mains. But yea, like any insurance, if you can
afford the $3-4k of repairs without having to skip meals, you probably don't
need it.

Edit to add: my source is that this happened to me, it was enormously
expensive to repair. I still wouldn't get this insurance though.

------
iUsedToCode
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
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
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
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
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.

------
TazeTSchnitzel
Bad for the power companies, but good for humanity? The earth does not need
more CO2 pumped into the atmosphere.

~~~
cdpolyme
Is it a global trend, though? Or is the energy consumption just being moved
abroad?

~~~
icebraining
It's a good question, but household consumption is also dropping, and it's not
clear how would that be outsourced.

------
unreal37
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-
min...](https://qz.com/1204840/iceland-will-use-more-electricity-mining-
bitcoins-than-powering-homes/)

~~~
Tade0
Iceland is a nation of ~300k people, so in the grand scheme of things that's a
minuscule amount.

------
loourr
Don't worry utilities, electric demand is going to double once we switch to
electric cars.

~~~
spenrose
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)

~~~
toomuchtodo
There's a DoE paper from about 5-7 years ago that shows ~80% of light vehicles
could move over to electrification, and if charged at night during off-peak,
no additional generation capacity would be required.

~~~
spenrose
1) The key word there is "capacity." The energy still needs to be _generated_.

2) Coordinating EV charging with grid dynamics is a hot topic, but getting
100M vehicles to charge largely at night is not on anyone's roadmap for the
next decade.

~~~
erikpukinskis
What has to be coordinated? People drive to work, park, drive home, plug in,
and the car minimizes charging fees. I assume there are already APIs in place
to get spot prices.

------
MR4D
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
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
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
I don’t think I can disclose that, but I’m in Italy so it’s probably not very
comparable.

------
jedberg
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.

~~~
narrator
As electricity usage falls they can just mothball old plants that require more
maintenance. This should lower their fixed costs.

~~~
jedberg
But if the overall usage trend is downward, how do they justify building new
plants to replace the ones that fail?

------
StillBored
And no mention of electric cars, which by themselves could more than double
demand...

~~~
imglorp
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...](https://www.greentechmedia.com/articles/read/how-ev-chargers-and-
energy-storage-can-make-good-grid-partners)

~~~
infogulch
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
Solar energy that never ends up on the grid at all could end up doing that.

------
rfugger
Maybe they could mine Bitcoin with their spare capacity.

~~~
gjem97
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
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.

------
gumby
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)

------
Paul-ish
> 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?

------
kragen
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
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
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-in...](https://www.solarserver.com/service/pvx-spot-market-price-
index-solar-pv-modules.html) 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...](http://www.pvxchange.com/priceindex/default.aspx?template_id=1&langTag=de-
DE) 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.

------
tim333
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.

------
adventured
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-...](https://www.bloomberg.com/gadfly/articles/2018-02-22/energy-
costs-big-oil-and-power-face-new-competition)

------
dalbasal
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
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).

~~~
nkurz
I'm not sure I understand the OP exactly, but I think I feel similarly. The
issue for me is that by improving efficiency without changing the long-term
growth curve, you're only buying a few years of reprieve. The fear is that
this reprieve that feels effective in the short term might actually be
delaying development of a proper solution.

Consider an immediate 50% improvement in fuel efficiency, but with a 10%
increase in usage per year. In less than a decade, you are back to where you
started, but now the chances of another 50% improvement in efficiency are very
low. Worse, the lower cost due to the efficiency improvement may have actually
accelerated consumption.

The question is whether the "kick the can" approach will eventually leave you
in a position where you can't recover, and whether your efforts would have
been better spent on solving the underlying problem of system that depends on
limitless growth and the externalization of environmental damage.
Unfortunately, it's hard to come up with a "real" solution that doesn't
involve massive cutbacks in consumption and/or hard caps on human population.

~~~
icebraining
Ah, thanks, re-reading the previous post in light of yours makes sense (hence
the "detour"). I guess I hadn't understood before because I don't see carbon
taxes as fitting with that complaint against efficiency - people are free to
become more efficient _or_ to keep consuming as much energy, as long as its
from non-emitting sources.

It's true that in some areas the EU does mandate efficiency, such as in ICE
vehicles. But even there, it's not like they say "you must build N efficient
diesel cars", what they're saying is "if you're going to sell diesel cars,
they must be efficient".

In summary, I think the sale of efficient cars and such is still a market
process. If the EU didn't mandate efficiency, all we would get is inefficient
gas guzzlers, not EVs.

 _Worse, the lower cost due to the efficiency improvement may have actually
accelerated consumption._

I don't think so, because the efficiency requirements are accompanied by
higher taxes in fossil fuels. At least in my country, the amounts spent on gas
monthly hasn't really been dropping, even as cars become more efficient.

~~~
nkurz
_At least in my country, the amounts spent on gas monthly hasn 't really been
dropping, even as cars become more efficient._

I'm not familiar with this area, but I think that in the US retail gasoline
prices (that is, including all taxes) have been historically flat. This means
that efficiency gains fairly directly to lower operating costs, and hence
result in greater demand: "In constant dollar terms, the price of gasoline in
2015 was only seven cents higher than in 1929."

[https://energy.gov/eere/vehicles/fact-915-march-7-2016-avera...](https://energy.gov/eere/vehicles/fact-915-march-7-2016-average-
historical-annual-gasoline-pump-price-1929-2015)

I don't think that fuel taxes have increased much on a constant-dollar per-
gallon basis. Considering inflation, the federal rate has in fact dropped
significantly: "Since 1993, the US federal gasoline tax has been 18.4¢/gal
(4.86¢/L)."

[https://en.wikipedia.org/wiki/Fuel_taxes_in_the_United_State...](https://en.wikipedia.org/wiki/Fuel_taxes_in_the_United_States)

I don't know how the state rates have changed (they are of the same magnitude
as the federal rate, ranging from 20-40¢/gal) but my guess would be that they
too are historically fairly constant per gallon over the recent decades of
efficiency improvements, resulting in an inflation adjusted decrease in the
proportion of tax being paid.

~~~
icebraining
Fair enough, but the parent poster was talking about the EU. Has the US
enforced the same levels of efficiency by law?

~~~
nkurz
It's hard to for me to compare directly because the US standards are expressed
as miles/gallon while the EU standards are g CO2/km, but I think the US has
about the same standards as the EU, although historically trailing by 5 years
or so: [http://www.rff.org/files/document/file/RFF-
PB-16-03.pdf](http://www.rff.org/files/document/file/RFF-PB-16-03.pdf)

But answering the implied general question, yes, the US does have legally
mandated efficiency standards for vehicles, and the total number of miles
driven is about 3 times what it was in 1970:
[https://www.afdc.energy.gov/data/10315](https://www.afdc.energy.gov/data/10315).

------
oceanswave
>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.

------
Zigurd
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.

------
mbloom1915
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
What are these "new sexy solutions"?

~~~
EADGBE
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.

------
cdibona
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..

------
fastbeef
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.

------
jacquesm
Electric vehicles will change this quite a bit.

~~~
matt_wulfeck
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.

------
gwbas1c
"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.

------
mbostleman
"...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.

------
matwood
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
"I'll believe it when I see it" is a very hard mindset to overcome.

------
maerF0x0
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.

------
teilo
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
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
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.

------
Reason077
Flat demand? In the UK, electricity demand has been _falling_ for more than a
decade, despite significant population growth and GDP growth.

------
pfarnsworth
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.

------
dc2
It's disheartening that this article is painted as a disaster. This is
fantastic news!

------
age_bronze
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.

------
dbcooper
The graph has no units. How has demand for electrical energy (kilowatt hours)
changed?

------
mtgx
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
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.

------
Caveman_Coder
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.

------
drdrey
Electricity demand in the US, that is. Where is the global perspective?

~~~
rsynnott
Globally, demand is going up, dramatically. It's generally falling in advanced
industrialised countries, though.

~~~
spenrose
I don't think of < 10% / year as "dramatic", but YMMV:

[https://yearbook.enerdata.net/electricity/electricity-
domest...](https://yearbook.enerdata.net/electricity/electricity-domestic-
consumption-data.html)

------
ant6n
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).

------
crb002
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.

------
jasonsync
The delivery, regulatory and other charges on my monthly bill are typically
higher than the actual electricity charges ...

------
egor598
Hooray! Let's release another batch of cryptocurrencies and start mining the
shit out of those!

~~~
oceanswave
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.

------
jasonmaydie
Why would they freak-out when an increasing number of cars are going to be on
the grid?

~~~
macintux
Future hypothetical increased demand, no matter how likely, is still future.

------
strictnein
Strange article. It's been flat for over 10 years, per the first graph they
show.

------
pmarreck
Not for long... Electric vehicles are coming. This is the calm before the
storm

------
overcast
Don't worry, cryptocurrency will pick up wasting energy for no purpose.

------
zukzuk
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
it has

[https://news.ycombinator.com/item?id=16474076](https://news.ycombinator.com/item?id=16474076)

------
vipr340
Anyone here running off the grid systems entirely?

------
ilkan
Was this measured before the Bitcoin surge?

------
coolso
> freaking out

[citation needed]

------
Dowwie
Will prices fall?

~~~
simonsarris
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.

~~~
cletus
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
> 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
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/...](https://www.mckinsey.com/industries/media-and-
entertainment/our-insights/we-are-wrong-about-millennial-sports-fans)) 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...

~~~
cletus
This is a debate in the industry with wide-ranging implications. It basically
boils down to will we have a wireless future as the primary means of Internet
delivery or will we not?

And there's no clear answer. Sure 5G (even 4G) is fast but could it handle,
say, all of Manhattan using it with no fixed line Internet? I have my doubts
even with the 5G focus on concurrent connections. Or if it could it may just
suck a lot of the time.

Wired (particularly fiber) has many distinct advantages:

1\. The lifespan of the infrastructure is like 30-40+ years, possibly much
longer;

2\. Once you have the fiber in place it's pretty easy to change the lasers at
either end and boost the speed, likely to 10Gbps+ if required;

3\. Fiber unlike wireless doesn't suffer from interference and the amount of
data you can get down a conduit with all the fiber strands you can fit is
simply gigantic.

But of course wireless doesn't have the massive upfront capex cost that a
fixed-line network does. As much as people (reasonably) deride the US cable
industry, high speed Internet pretty much exists in the US because of riding
the coattails of the infrastructure that was built in the latter part of the
20th century. Who knows where we'd be without it?

If you had to build that infrastructure from scratch today the cost would be
astronomical. This isn't unique to cable or telecommunications either. It
seems like in virtually every Western country the cost of infrastructure has
ballooned to the point where many things that exist now would just be
uneconomical to create now (eg rail and subways in major US cities) and that's
going to be a huge problem going forward.

Of course this isn't a binary problem. The future may be a hybrid (eg wireless
last-mile).

As for your point about cable companies fighting competition at the regulatory
level, absolutely true. It's not a simple issue however. As much as cable
companies are desperately fighting commoditization (they don't want to be the
provider of dumb Internet pipes), an overbuild with a fixed-line network
doesn't make much sense either economically.

It's why we only have one water network, one gas network and one electrical
grid (per region; many in the US have this deluded view that regional
monopolies are somehow "competition"). It's also why utilities are highly
regulated as they are monopolies. It's also why ISPs need to be regulated as a
monopoly. Internet is the so-called 4th utility.

But this regulation will prevent naked price gouging. It will however impact
the cost per kWh and ultimately regulators will have to relent to let them
raise prices to cover costs.

------
m3kw9
Maybe efficiency is catching up with demand

------
lawlessone
This is great news

------
lostmsu
This should be a kick to the shrinking heavy industry.

------
CompelTechnic
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
Literally half my bill is distribution charges.

~~~
martinald
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.

------
xstartup
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
Wireless is not going to solve anything. The lowest loss method for long
distance transmission is high voltage DC.

~~~
dredmorbius
DC or AC?

~~~
jeffreyrogers
DC, but the equipment to convert from AC to DC and vice-versa is expensive so
it doesn't get used as much.

~~~
quickthrower2
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.

