Opinion

Link Between Growth in Economic Activity and Electricity Use is Changing Around the World


graph of GDP and electricity use growth rates, as explained in the article text

Source: U.S. Energy Information Administration, World Bank

Growth in economic activity (measured as gross domestic product) has tended historically to be coupled with increases in electricity use as populations grow and generate more goods and services. However, more recently this relationship has been decoupling in many countries. The amount of decoupling in various countries is caused by many factors—including the countries' relative level of development, electrification, economic makeup, and income levels.

Most member countries of the more developed Organization for Economic Cooperation and Development (OECD), such as the United States, United Kingdom, and Japan, have been shifting from manufacturing economies toward service economies. Service-based economies tend to use less electricity than economies with high levels of industrial activity, as commercial services are generally less energy-intensive compared with manufacturing.

OECD member countries still have sizable manufacturing sectors, but they are shifting toward advanced manufacturing, which uses technologies that tend to be less energy-intensive. As more economic activity shifts from lower-skilled manufacturing to services and higher-skilled advanced manufacturing, additional economic activity can be generated without requiring as much electricity use.

graph of electricity use and GDP per capita, as explained in the article text
Source: U.S. Energy Information Administration, World Bank

Some non-OECD member countries, such as China, India, Brazil, and Egypt, have rapidly growing economies, often generated by a large or growing manufacturing sector. However, these economies use technologies that are less efficient and have lower-skilled labor relative to OECD countries, which requires more energy and more electricity usage to generate goods and services.

National electricity use among OECD member countries has generally remained flat in recent years, and in EIA's International Energy Outlook 2017 (IEO2017), electricity use from these countries is projected to grow modestly. Total electricity use by non-OECD member countries, however, surpassed electricity use by OECD members in 2011, and IEO2017 projects it to continue growing. The amount of electricity needed in the future will largely depend on how fast non-OECD economies grow and what type of activities make up that economic growth.

For both groups, IEO2017 projects electricity growth to remain lower than the rate of economic growth. In the IEO2017 Reference case, among OECD member countries, gross domestic product (GDP) increases by 1.7% per year, and electricity use increases by 0.9% per year between 2015 and 2040. In non-OECD countries, GDP increases by 3.8% per year, and electricity use increases by 2.0% per year over the same period.

graph of electricity use and GDP , as explained in the article text
Source: U.S. Energy Information Administration, International Energy Outlook 2017 Reference case
Note: Gross domestic product comparisons based on purchasing power parity (PPP).

Principal contributor: David Peterson


Visit source site

https://eia.gov/todayinenergy/detail.php?id=33812&...

EIAEnergy Information Administration EIAUnited StatesElectricityWorld BankNon-OECD

More items from oilvoice


Merger in Energy Efficiency Sector Creates Strategic Opportunities

With the rising cost of energy and greater interest in reducing CO2 emissions, retrofitting existing equipment has gained momentum, and an impending merger can provide a more comprehensive approach. A number of companies have arisen to service the market, including Smartcool Systems Inc. (S ...

OilVoice Press - OilVoice


Posted 39 minutes agoOpinion > mergerStreetwise ReportsEnergy +1

ENGIE to Continue Expanding Decentralised Energy Offering Following Year of Successes

ENGIE to champion decentralised energy at upcoming Africa Energy Forum    Mauritius, 19 June 2018 – Global utility ENGIE is confirming its focus on off-grid energy provision in Africa, with plans to continue expanding their solar home system (SHS) and mini-grid activities. ENGIE is launchin ...

OilVoice Press - OilVoice


Posted 6 hours agoPress > ENGIEEnergyAfrica Energy Forum +1

FACTBOX: Venezuela's Near Collapse Takes Toll On Oil Industry

Venezuela's near economic collapse has taken a toll on the country's oil production, causing shifts in oil flows as buyers look to secure alternative supplies. As workers have fled the country, state-owned oil company PDVSA has had a difficult time maintaining crude output, let alone boosting prod ...

OilVoice Press - OilVoice


Posted 6 hours agoOpinion > S&P Global PlattsVenezeulaOil +5

Bass Oil: Onshore Indonesian Oil Operations Update – May 2018

Highlights New multi-year high monthly average oil price of US$70.51 realised from sales from theCompany's 100%-owned Tangai-Sukananti oil field in onshore Sumatra, Indonesia 9% higher total May production of 18,500 barrels of oil (JV share) or 10,175 barrels (net to Bass) May oil sa ...

OilVoice Press - OilVoice


Posted 6 hours agoPress > Bass OilonshoreIndonesia +4

Adoption of Autonomous Vehicles Could Increase U.S. Transportation Energy Consumption

Source: U.S. Energy Information Administration, Annual Energy Outlook 2018 Autonomous Vehicles: Uncertainties and Energy Implications Autonomous vehicles are one of the main sources of uncertainty in the future of U.S. transportation energy consumption, as autonomous vehicle technology has ...

OilVoice Press - OilVoice


Posted 1 day agoOpinion > United StatesUSEIA +3
All posts from oilvoice