If the future was easy to predict, we probably wouldn’t spend so much time thinking about it.  But even if it is very hard, that doesn’t mean there’s no sense in trying to make predictions.  Case in point, the Energy Information Administration (EIA), which is part of the DoE, has put out their latest forecast with views of our energy needs stretching out to 2040.  Such forecasts give our lawmakers and government workers a framework of understanding to shape and direct policy.  Below are some selected charts from the report.

Electricity generation by fuel type 1990-2040

It should be no surprise to anyone that our electricity needs are rising.  The US will need more electricity in the future than it does today.  Most of that can be attributed to a growing population.  So where will that energy come from?  Much of it will still come from coal.  Renewable energy will grow from where it does today, but not that much.  Nuclear energy is basically flat.  So that only leaves natural gas as the future of our energy needs.  Don’t like that?  Don’t complain just yet.

primary energy use by fuel in reference case

This chart shows all our energy usage, not just for electricity.  The big piece here is petroleum because the chart includes our needs for vehicles as well.  Notice again, how fossil fuels remain critical into the future.

average retail prices for electricity 2012-2040

The government has already put many policies in place designed to clean up coal and oil use.  The hope was that energy producers, like utilities, would clean up coal plants.  But the producers think it may be too expensive.  Same goes for nuclear.  So plants are shutting down.  As more plants are taken offline and new ones not constructed, the cost of electricity can only go up.  Without new policy or innovative technologies, our current path can only lead to pricier utility bills.

Average prices for natural gasLikewise, even natural gas is going to get more expensive.  Unlike coal, the price of natural gas is also more volatile meaning less predictability in the cost (and your electric bill).  Natural gas may have some advantages to coal, but it’s no savior.

US electricity demand growth 1950-2040

And as I said before, in total, Americans will use more energy in the future than today.  Even if the rate of growth slows.

energy use per capita per dollar of gdp 1980-2040

Now for some good news.  You are doing your part.  Energy use per person is expected to decline slightly into the future.  And while energy per unit may be more expensive, per dollar of GDP it won’t be.  Which means we should be able to afford our bills.change in residential energy consumption 2012-2040

And finally, what are we using our electricity for in the future?  Not the same things as today.  Most appliances will get more efficient.  Much of our use may come from other sources (such as charging electric/hybrid cars in the garage).

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categories: economics, environment, government, science, technology