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


NPD: Dry Well Near the Njord Field in the Norwegian Sea - 6407/11-1

Equinor Energy AS, operator of production licence 751, is in the process of concluding the drilling of wildcat well 6407/11-1. The well is dry. The well has been drilled about 15 kilometres southeast of the Njord field and 120 kilometres north of Kristiansund. The primary exploration target for ...

OilVoice Press - OilVoice


Posted 22 hours agoPress > EquinorEquinor EnergyDry Well +7

Total Strengthens Its Exploration Position In Mauritania

Paris - Total and the Ministry of Petroleum, Energy and Mines of Mauritania have signed an agreement awarding Total two new exploration and production contracts for Blocks C15 and C31 deep offshore Mauritania, covering an area of 14,175 square kilometers. According to the terms of the contracts, ...

OilVoice Press - OilVoice


Posted 22 hours agoPress > TotalMauritaniaOffshore +2

November U.S. Natural Gas Prices Increased Beyond Previous Market Expectations

Source: U.S. Energy Information Administration, based on Thomson Reuters On November 23, the natural gas spot price at the Henry Hub in Louisiana was $4.70 per million British thermal units (MMBtu), the highest price since a temporary spike in January 2018, and before that, the highest price s ...

OilVoice Press - OilVoice


Posted 23 hours agoOpinion > United StatesNatural Gas Pricenatural gas +3

Chevron Announces $20 Billion Capital and Exploratory Budget for 2019

SAN RAMON, Calif.--(BUSINESS WIRE)--Dec. 6, 2018-- Chevron Corporation (NYSE:CVX) today announced a 2019 organic capital and exploratory spending program of $20 billion. “Our 2019 budget supports a robust portfolio of upstream and downstream investments, highlighted by our world-class Permian Basi ...

OilVoice Press - OilVoice


Posted 6 days agoPress > ChevroncapitalBudget +5

Royal Dutch Shell PLC Third Quarter 2018 Euro and GBP Equivalent Dividend Payments

The Hague, December 6, 2018 - The Board of Royal Dutch Shell plc (“RDS”) today announced the pounds sterling and euro equivalent dividend payments in respect of the third quarter 2018 interim dividend, which was announced on November 1, 2018 at US$0.47 per A ordinary share (“A Share”) and B ordinar ...

OilVoice Press - OilVoice


Posted 6 days agoPress > ShellRoyal Dutch ShellEarnings +2
All posts from oilvoice