End of a (long) era: Leading economists predict electric demand will fall

By Jesse Berst   Economists Ahmad Faruqui and Doug Mitarotonda of The Brattle Group have given Smart Grid News a sneak peek at an upcoming white paper, co-authored with economists at Global Energy Partners, that draws some intriguing conclusions. The duo believes that electric demand in the U.S. will fall 5% to 15% by the year 2020, compared to what it would have been without incremental improvements in energy efficiency

The authors posit we are entering a fourth wave of energy efficiency, which they name "integrated demand-side management (iDSM)." iDSM incorporates demand response along with programs that inform consumers about their energy spending. This fourth wave will increase the energy savings possible.

As evidence, they cite a recent poll of 50 energy experts representing universities, governments, utilities, research laboratories and consulting firms. "The survey results clearly repudiate the notion that the age of energy efficiency has come to an end," they write. "On the contrary, they herald a new beginning for energy efficiency."

Yes, the U.S. occasionally sees demand slip backward during recessions. But our system is predicated on the idea that demand will inexorably rise over time. If that era is now over, our attitudes and institutions and investment priorities will have to undergo massive change.

Recommended reading: Download the excerpt "Energy Efficiency in 2020 –What do the experts think?" (pdf).

Jesse Berst is the founder and chief analyst of Smart Grid News.com. He consults to smart grid companies seeking market entry advice and M&A advisory. A frequent keynoter at industry events in the US and abroad, he also serves on the Advisory Council of Pacific Northwest National Laboratory's Energy & Environment directorate.

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