Load Growth Continues to Slow in PJM, “It’s the Efficiency, Stupid”

Every year about this time, PJM Interconnection does a press release on its projected summer peak load.  Here’s the link to this year’s projection.

PJM Interconnection, operator of the nation’s largest electric grid, expects to have sufficient power this summer when air conditioners push power use to as high as 155,553 megawatts. This compares to PJM’s all-time peak demand of 163,848 MW. PJM serves 60 million people in 13 states and the District of Columbia. One megawatt is enough to power 1,000 households.

To meet demand, PJM has available 186,884 MW of installed electricity generation capacity and 11,175 MW of demand response and energy efficiency. Demand response means there are customers who are paid to reduce their energy use at peak time periods on request and energy efficiency pays customers who modify their buildings to save electricity. This amount of demand response and energy efficiency is about the same as the total amount of nuclear capacity in the state of Pennsylvania.

This year’s summer forecast for power use includes East Kentucky Power Cooperative, which will be fully integrated into PJM on June 1, 2013. Together with EKPC, the anticipated demand growth from 2012 to 2013 is 0.9 percent, slightly lower than normal due to the continuing effects of the slow economy.

Remember back in 2008 when PJM was predicting annual load growth of 1.5% year?  PJM has been revising its annual demand projections downward every year since then.  This year’s annual growth rate is now only .9%.

In the years immediately following 2008, PJM blamed falling demand on “the recession.”  Now that “the recession” has become long term stagnation, PJM uses the euphemism “the continuing effects of the slow economy.”

To really understand what is happening, use the quote above to do a little math.  PJM’s projected 2013 summer peak is 8,295 MW less than its record summer peak.  Efficiency and demand response for 2013 represents 11,175 MW of PJM’s current capacity.  In other words, deliberate demand reduction is now the major factor in slowing load growth in PJM.  This year’s amount of demand reduction would have eliminated PJM’s earlier peak record, and still would have had about 3000 MW left over to cover demand growth from other causes.

PJM opened its capacity markets to demand resources for the first time in the 2007/2008 RPM markets.  If you look at the math, it is clear that energy efficiency and demand management have made more of an impact on reducing load growth in PJM as the “effects of the slow economy” between 2008 and 2013.

The boys at PJM need to look around at their own industry.  Electricity demand has become less and less connected to economic growth, as demand management becomes embedded in US electrical technology.  See for yourself.

But PJM engineers seem to see the world through the eyes of the big power companies that run the PJM cartel.  Those power companies, that have huge investments in generating electricity, continue to hope that “when the economy recovers” electricity demand will boom.  Guess again, boys, those days are gone.  To paraphrase James Carville, “It’s the efficiency, stupid.”

For a further explanation of this graph, see the link to my earlier post as above.

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