Peak electrical power: the US continues to de-industrialize

One fascinating sign of America’s changing technological and economic life appears in this Bloomberg News article.  The United States is making, and using, less electricity than we used to.

That’s a surprise, given the 20th century’s spectacular growth of industry and technology, but the decline is real:

American electricity generation 1949-2016; source USEIA

Justin Fox goes into fine detail, probing different theories, but readers might be asking at this point, “Why does this matter, unless I’m a utilities wonk?”

Several reasons.

First, it points to the continuing deindustrialization of the US, as we shift towards a service and knowledge-based economy.

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 Factories use a lot of electricity.

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 Fewer factories and you get this in just a few years:

electricity sales by sector_2001-2016

And seen through another measurement, we can see the decline starting around the 1980s, right when offshoring and financialization began to take off:

electricity per GDP_1949-2016

So this electrical transform shows how America’s economy is changing.  The effects of moving away from industry ripple across our society.

Second, this change shows the importance of new attitudes towards energy: conservation, cost control, and efficiency.  Some of this is about economics.  I think it’s no accident that the last chart above shows a decline starting after the great 1970s oil shock.  And it’s clear that the economy after 2008 took a serious hit, which we really haven’t recovered from – we’re still working through austerity and belt-tightening.  On another level this could indicate progress in environmental thinking, where power waste is less popular than it was before the first Earth Day.

Third, it points to how lame the American economy has been.  As the Bloomberg writer points out,

a grim new economic era dawned in 2000 or 2001 that has been characterized by slow growth, declining labor-force participation and general malaise — all of which tend to depress energy demand…

I would add to that productivity growth’s stalling out, plus the fierce decoupling of worker compensation from business profits. The American economy just isn’t demanding as much as it used to, or should.

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Fourth, as a sign of the future, this could hint at what a truly post-industrial economy looks like.  That’s one where we are more focused on digitally-related activity and transportation, and not so much on making stuff.  It’s one where some form of environmental consciousness has spread through daily life.

What does this have to do with education?  As my readers know, changes in the American economy have powerful effects on every bit of schooling from pre-K through graduate programs.  The shift away from manufacturing and towards service and knowledge sectors has already changed curricula.  Economic malaise has squeezed state budgets, and, in part as a result, they contribute less to public colleges and universities.

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On a more direct level, a number of campuses have taken steps to change their physical plants to use less power and/or to create their own.  We use digital technologies to collaborate and research, which shifts electrical expenditures away from travel and towards keeping computers humming.

Looking head, will schools become the grounds for new experiments in power, such as wireless transmission or alternative generation sources?

Do you think this decline will keep going, or will new electrical uses hit the grid?

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2 Responses to Peak electrical power: the US continues to de-industrialize

  1. edwebb says:

    One possible area for demand growth would be electrification of transportation on large scale, particularly if it takes off in freight as well as passengers. Elon Musk is teasing an electric truck. Large electric planes would change things a lot.

  2. ted says:

    Funny you should mention universities generating their own power. This morning’s paper had an article about the University of Alabama installing solar panels to provide power for the baseball stadium.

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