{"id":961,"date":"2014-02-04T09:42:10","date_gmt":"2014-02-04T15:42:10","guid":{"rendered":"https:\/\/allenergyconsulting.com\/blog\/?p=961"},"modified":"2014-02-04T16:29:53","modified_gmt":"2014-02-04T22:29:53","slug":"peak-energy-are-we-there-in-the-us","status":"publish","type":"post","link":"https:\/\/allenergyconsulting.com\/blog\/2014\/02\/04\/peak-energy-are-we-there-in-the-us\/","title":{"rendered":"Peak Energy \u2013 Are we there in the US?"},"content":{"rendered":"

Peak energy can be related to many things from Peak Demand, Peak Oil, etc\u2026\u00a0\u00a0 Let me clarify my discussion.\u00a0\u00a0 Peak energy in my context is the electric energy being consumed by the end user each hour and averaged.\u00a0\u00a0 Therefore, the unit of peak energy is Megawatt Average (MWa).\u00a0\u00a0 This is much different than the peak demand Megawatt (MW) which occurs in one hour.<\/p>\n

I am writing about this topic as I have just analyzed 118 Load Zones across the N. American continent.\u00a0\u00a0 Statistical analysis was done on those areas incorporating 26 variables, which included 9 weather zones \u00a0(CDD & HDD) and 8 economic regions starting with data back to 2009.\u00a0 This was an arduous and complex task as each individual zone needed its own menu of variables to optimize the analysis.\u00a0 AEC is about to launch a new online product \u2013 Power Market Analysis (PMA).\u00a0 PMA will be an online product with annual subscription access to power prices projections across the country and fuel consumption forecast of coal and gas in the power sector for the next two years \u2013 More information on PMA to come.\u00a0 Load represents a fundamental input in analyzing the power markets, so the task had to be done.<\/p>\n

The results of the analysis are very eye opening.\u00a0 The R squared (indication of how well data points fits to the variables analyzed with \u2013 ranges from 0 to 1, poor to perfect fit) across all 118 load zones averaged 0.92.\u00a0 There were several regions which have now begun to decouple from GDP.\u00a0 The economic well-being of several regions is no longer driving the growth of power.\u00a0\u00a0 At this point, I can hear grumblings and concerns at investor held utilities since the load growth is the main mechanism on shareholder returns.\u00a0 Don\u2019t stop reading, it\u2019s not all gloom or doom for all utilities.\u00a0\u00a0 There are two main reasons for this decoupling of GDP.\u00a0\u00a0 First is the increase spending in Demand Side Management programs across the country to a tune of $9 Billion.\u00a0 Second, we may have reached a peak point in energy consumption per capita.\u00a0\u00a0 As you look around, how many more devices can you obtain?\u00a0 Each new device is incorporating better and improved efficiency.\u00a0 At some point, we will hit a limit to the energy consumption each of us can do.\u00a0\u00a0 We are clearly seeing this in this analysis in certain large metropolitan areas when you strip out the weather component.\u00a0\u00a0 However. I am only seeing this in certain regions.<\/p>\n

The EIA put out a briefing on March 22, 2013<\/a> alluding to this.\u00a0 The graph below does not seem to be weather normalized.\u00a0 This can lead to a skew vision of what has gone on recently.<\/p>\n

\"\"<\/a><\/p>\n

Weather has been a large factor over the recent years.\u00a0\u00a0 If you look at the GDP from 2010 to 2013 the growth is close to 4%\/yr.\u00a0\u00a0 If you look at electricity consumption without normalized weather the picture will show an annual decline of 1%\/yr.\u00a0\u00a0 However, if you strip out the weather component, the load growth is closer to 2.3%\/yr.\u00a0 2010 was an extremely warm year with cooling degree days across the country 21% greater than a normal year.<\/p>\n

Weather variations will lead to consumption change as we have become quite temperate in our ability to adapt to various climates.\u00a0 The weather piece will need to be stripped out of the discussion when it concerns understanding the relationship between power consumption and the economy.\u00a0 Peak energy discussions cannot include a conclusion on the basis of extreme weather events.\u00a0 Based on our analysis we still project a rather robust growth in power consumption of 1.9%\/yr for N. America based on normal weather and GDP growth around 3%.\u00a0\u00a0 Areas that are seeing significant growth are related to the Oil & Gas areas such as Texas, Alberta, Louisiana, and even pockets in the Midwest with shale development.<\/p>\n

PMA will offer a daily view of the next two years with three different scenarios \u2013 base, high power price, and low power price.\u00a0\u00a0 The changes between the cases will be weather, GDP, and gas prices.\u00a0 In addition subscribers to PMA will be presented monthly with scenario and sensitivities which delve into the greater market dynamics seen in the power space.\u00a0\u00a0 PMA will be valuable to those in the Oil & Gas, Coal, and Power industry.\u00a0\u00a0 For the Oil, Gas, and Coal companies the focus will be on better understanding on fuel consumption in the power sector.\u00a0\u00a0 The power industry the fuel and power prices will be available.\u00a0\u00a0 In terms of functions within an organization, expect value to be given to Trading, Fundamentals, Budgeting, Fuel Contracts, and Policy groups.<\/p>\n

There is more to come on PMA as we expect a product launch sometime in February.<\/p>\n

Your Tireless Analyzing Energy Consultant,<\/p>\n

David K. Bellman<\/a><\/p>\n

614-356-0484<\/p>\n

Twitter: AECDKB<\/p>\n","protected":false},"excerpt":{"rendered":"

Peak energy can be related to many things from Peak Demand, Peak Oil, etc\u2026\u00a0\u00a0 Let me clarify my discussion.\u00a0\u00a0 Peak energy in my context is the electric energy being consumed by the end user each hour and averaged.\u00a0\u00a0 Therefore, the unit of peak energy is Megawatt Average (MWa).\u00a0\u00a0 This is much different than the peak […]<\/p>\n","protected":false},"author":1,"featured_media":216,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1,3,6,17],"tags":[251,250,248,252,99,249],"class_list":["post-961","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-market-insights","category-natural-gas","category-power","category-renewables","tag-energy-usage","tag-fuel-consumption","tag-peak-energy","tag-pma","tag-power-prices","tag-weather-normalization"],"_links":{"self":[{"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/posts\/961","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/comments?post=961"}],"version-history":[{"count":7,"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/posts\/961\/revisions"}],"predecessor-version":[{"id":965,"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/posts\/961\/revisions\/965"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/media\/216"}],"wp:attachment":[{"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/media?parent=961"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/categories?post=961"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/tags?post=961"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}