The fall in UK electricity generation to its lowest level since 1994, as reported on the Carbon Brief website earlier this month, reflects a trend in the energy market that is too often ignored. The decline in consumption is not limited to the UK or to electricity. Over the past decade, both total energy demand and electricity use have fallen across the developed world. Since 2010 demand has declined in 18 of the 30 countries that are members of the International Energy Agency. There are several different reasons for the decline in consumption. Technical advances have improved the efficiency of products ranging from washing machines and fridges to computer servers have been underpinned by regulatory changes such as the introduction of LED lighting. Economies have deindustrialised to differing degrees, while in some countries a proportion of the fall has been caused by low economic growth. Although analysts and policymakers frequently assert that electricity will lead the shift to a low-carbon economy, there is so far only limited evidence of a real change. Electricity has only marginally expanded its share of final energy consumption since 2000 despite the growth of computers, telecommunications and the proliferation of domestic appliances. A small number of electric cars and the rising use of electricity in other parts of the transport sector starting with the railways have not yet made a material difference. By 2017, electricity contributed less than 1 per cent of final energy consumption in the transport sector, according to the IEA. As consumers upgrade equipment to ever more efficient models and as regulations force standards to rise, electricity consumption is likely to drop. A revolution in battery technology would in theory stimulate demand for electricity. But any growth in the use of batteries (and other forms of energy storage) will also serve to eliminate waste and the loss of electric power, which as of now can only be used as soon as it is produced. Smart meters and grids will also improve efficiency rather than increasing demand. Falling demand makes it harder to justify substantial long-term investments in new capacity. Higher cost producers – for instance of new nuclear power – are finding themselves squeezed out.
FT 21st Jan 2019 read more »