American Consumers Spending Less Than Ever On Energy
A new report has revealed that American consumers spent less than 4% of their total annual household spending on energy in 2016 — heating, transport, and electricity — the smallest share ever recorded by the US Government.
The findings are part of the fifth edition of the Sustainable Energy in America Factbook, compiled by research firm Bloomberg New Energy Finance (BNEF) for the Business Council for Sustainable Energy (BCSE). Over the five years that the report has been compiled, the contributions of sustainable energy technologies to the transformation of the US energy sector have been significant, and included:
- The addition of 76 gigawatts (GW) of renewable energy generating capacity, and 39 GW of natural gas-fired capacity. Renewables (inclusive of large hydro) and natural gas now meet half of US power demand, up from only 38% in 2011.
- A 10% improvement in US energy productivity, meaning the US economy is using 10% less energy to power each unit of growth.
- A 4% drop in average retail electricity prices in real terms. In New York, Texas, and Florida, prices have fallen over 10% in that time.
- A 12% jump in total gas production, and a 79% surge in shale gas extraction since 2011.
- A 12% improvement in vehicle fuel economy, propelled by federal fuel efficiency standards.
The 2017 edition of the report contains figures relevant through to the end of 2016, and includes the headline revelation that US consumers spent less than 4% of their annual household spending on energy, thanks in part to the falling costs of gasoline, natural gas, and electricity, and the increase in energy efficiency measures.
“Two thousand sixteen marked yet another monumental year in the energy sector, as the transformation in how the US produces and consumes energy continued to play out,” the BNEF authors begin. “The rapid pace of renewable energy deployment accelerated, consumption and export of domestic natural gas hit record levels, and the economy grew more energy efficient than ever. In the face of all this change, Americans are enjoying lower energy bills, directing less of their household income to energy spending than at any other time on record.”
Retail electricity prices fell across the United States by 2.2% in 2016, and consumers are now paying 4% less per kilowatt-hour for electricity than they were in 2007. This is an average, however — in New York, average retail prices of electricity are now 19% below 2007 levels, while in Texas average rates have fallen by 30%!
Retail natural gas prices also continue to decline, reaching record lows in 2016.
Meanwhile, the cost for developing wind and solar have fallen across the country. The capex cost of solar PV — the cost of constructing a project from beginning to finish — has fallen from $2.65 million per megawatt (MW) in 2011 to only $1.14 million/MW in 2016. Wind energy has also dropped, from $1.34 million/MW down to $1.12 million/MW over the same timeframe.
Energy efficiency efforts have also yielded significant results, especially in the power sector where the authors of the report predict that “energy efficiency measures appear to be making an impact on slowing load growth.” Electricity demand slipped 1.1% in 2016, while continuing further proof that there is a decoupling happening between energy and economic growth, America’s GDP increased by 1.6%. Electricity demand has now fallen 1.2% from its peak in 2014, while GDP over the same period has increased 4.2%.
“The contributions of sustainable energy to the country’s economic competitiveness are direct, dramatic and dynamic,” said Lisa Jacobson, President of the Business Council for Sustainable Energy. “The trend lines in the 2017 Factbook are clear: energy efficiency, natural gas and renewable energy are benefiting American consumers, American businesses and American manufacturers. And that adds up to one conclusion: clean energy wins for America.”
“The U.S. continues to use energy more efficiently and with lower CO2 emissions, while at the same time cutting consumer spending,” added Colleen Regan, Head of North America Power and Environmental Markets at BNEF. “2016 offered further proof that we can decarbonize and grow our economy, all without raising customer bills.”
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