Human Behavior – Past Is Prologue

If you accept that past is prologue when it comes to human behavior then we have all the data we need to know, and not just guess at, how much additional power we will need – each year -  over the next couple of decades if not beyond – 15,000 megawatts (“MW”) as it turns out. Let’s break that down.

The graph below tells us that over the past 58 years, the addition of new generating capacity has been essentially (and surprisingly!)  linear with time. What makes this particularly interesting is that the annual rate of increase in capacity has slowed over time (otherwise capacity would have increased exponentially).

The slowdown in new builds from the late 70′s through the late 90′s (when capacity growth actually went briefly negative) is also noteworthy. It was over this same period that deregulation of the power industry unfolded and the independent power producer (“IPP”) flourished. Deregulation led to a flurry of new IPP plants while many traditional utilities deferred new builds in the face of uncertainty. Eventually supply didn’t keep up with demand. Ultimately, a correction took place that peaked around 2000-2002.

Remember the rolling blackouts in California around this same time and all the political hoopla about Enron and others gaming the deregulated power market? Those with supply prospered and those with demand (especially CA ratepayers) paid out the nose until enough new plants were built to correct the imbalance. Supply and demand at work – a beautiful thing. Of course, far easier for politicians to go on a corporate witch hunt than admit  their failure to enact rationale public policy.

15,000 Additional Megawatts A Year

The figure below shows the same data as above but expressed in terms of the incremental power plant capacity built each year between the same 1949 and 2007 period.  Despite the peaks and valleys, this data clearly tells us that the US has, on average, added between 10,000-20,000 MW of power plants each year for the past 58 years. The long term trend line shows a gradual increase in this rate over time, but an average of 15,000 MW per year is a highly reliable historical guide.

Note that the spike in construction in the early 70′s represented a wave of mostly coal-fired plants whereas the even bigger spike in the early 2000′s was almost entirely due to new natural gas-fired plants.

Power To We The People

So what accounts for this steady 58 year demand for additional supply of electricity? The answer is sex and procreation. As evident in the graph below, the U.S. population has been growing 1-2% per year for most of the past 100 years and has steadied out at around 1% per year for the past 30-40 years. You don’t have to be a statistician to see the close correlation of population growth with the growth in power generating capacity shown above.

Every Baby Requires ~2.7 Kilowatts Of Additional Power

We knew kids were expensive but today each child also needs its own additional 2.7 kilowatts of power generation. Sixty years ago you’d only have needed 0.5 kilowatts per bundle-of-joy. The good news is we seem to have reached a plateau during the 80′s and 90′s and we might even be witnessing a slight reduction in per capita electrical demand.

So as we debate what forms of power generation will be acceptable, let alone needed, in a carbon constrained future, then unless we stop having sex or otherwise change our basic human behavior, we’re going to need 15,000 MW of additional power plants each and every year far into the future. Safe bet is on the megawatts.

Tags: electricity, energy policy, load growth, power, power generation