By - Jim Vess

A hot summer and cold winter drive U.S. electricity sales to a new record in 2018

Energize Weekly, March 13, 2019

U.S. electricity generation—driven by both a hot summer and a cold winter—rose 4 percent in 2018 to a record high of 4,178 million megawatt-hours (MWh).

Generation for the first time surpassed the 2007, pre-recession peak of 4,157 million MWh, according to the U.S. Energy Information Administration (EIA).

Retail electricity sales to both the residential and commercial sectors reached all-time highs in 2018.

“Weather is the primary driver of year-to-year fluctuations in electricity demand,” the EIA said. “The increased demand for electricity in 2018—including record demand in the commercial and residential sectors—is largely attributable to cold winters and a hot summer.”

Cooling degree days, a measure of warm weather and the demand for air conditioning, weighted for population, hit a record in 2018, while heating degree days, an indicator of cold weather and space-heating demand, were also high.

Heating days have less of an impact on electricity demand since there are several fuels used to provide heat, while air conditioning is primarily powered by electricity. So, cooling days have a direct impact on generation.

About 87 percent of U.S. households use air conditioning, and approximately 35 percent rely on electricity for home heating. Residential electricity sales were up 6 percent in 2018 compared to 2017.

The impact of weather on commercial buildings is more muted, but sales to the commercial sector were up 2 percent year-on-year.

Sales to the industrial sector have in recent years been flat. In 2018, they were down 3 percent compared to 2017.

Transport sector electricity sales account for less than a quarter of a percent of total sales.

Not included in the retail sales statistics is electricity generation from distributed sources such as rooftop photovoltaic solar arrays.

These installations reduce the amount of electricity bought by residential and commercial customers. Some business, such as Walmart, have extensive programs for developing solar on their properties.

Still, small-scale solar remains small and was estimated to have generated just 30 million MWh in 2018—up from one million MWh in 2007.

Economic and population growth are the main drivers of electricity demand, and EIA is projecting household growth at 0.7 percent a year and an increase in commercial floor space of 1 percent a year—leading to slower growth in electricity consumption than in recent years.

Improvements in technology and energy efficiency standards and programs will also moderate electricity consumption, with the EIA forecasting residential sales growing at 0.4 percent a year and commercial sales increasing 0.5 percent a year.

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