Electricity in Economic Growth (1986) / Chapter Skim
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2. Historical Perspective
2. Historical Perspective
Pages 15-56
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From page 15... ...
A more extended discussion of the period at ter World War II ~ ~ ~ or ~ ._~, goes into the correlation of electricity use with gross national product (GNPy, patterns of composition of economic sectoral electricity use, changes in output, and the effects of price changes. This material forms the basis for comment on the likely continuity of prior relationships and possible changes in them.
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From page 16... ...
As a consequence, the proport ion of the nation's primary energy supply used to produce electricity has expanded substantially -- from near zero at the turn of the century to 36 percent in 1983. The growing importance of electricity as a component of total energy supply can be seen in Figure 2-1, which shows the growth in primary energy input, in British thermal units (Btu)
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From page 17... ...
S Congress, 94th Congress, 1st Session (December 19751; Edison Electric Institute, Historical Statistics of the Electric Utility Industry through 1970, and Statistical Yearbooks; U.S.
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Congress, 94th Congress, 1st Session (December 1975~; Edison Electric Institute, Historical Statistics of the Electric Utility Industry through 1970, and Statistical Yearbooks; U
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* For any point on these lines one may calculate an average electricity intensity, that is, electricity consumption per unit of GNP.
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=h7^ in the United States." ~onceptua ~ by this quantity includes utility generation and nonutility generation ~ industrial self- and co-generation) , and net imports.
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Electricity data sources are Edison Electric Institute (1973, 1984a)
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From page 22... ...
Thus, incremental intensity of electricity use remained the same, even though average electricity i ntens ity rose . 5 e Another transition occurred following World War II, and the new trend line has persisted ever since (with a critical question remaining about the most recent past)
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From page 23... ...
Electricity data sources are Edison Electric Institute (1973, 1984a)
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* These def initions differ somewhat from the Edison Electric Institute (EEI)
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From page 25... ...
SOURCES: Based on data f rom Edison Electric Institute, Statistical Yearbook of the Electric Utility Industry, various issues; U.S. Department of Commerce, Bureau of Economic Analysis, The National Income and Product Accounts of the United States, 1929-76, Statistical Tables; and Survey of Current Business, various issues.
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From page 26... ...
SOURCES: Edison Electric Institute, Statistical Yearbook of the Electric Utility Industry, various issues.
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From page 27... ...
in the other two sectors, and commercial sector growth outpaced that of industrial output over the entire period.* In fact, if we examine the relationships between electricity use in these sectors and their respective economic measures, as in Figure 2-6, we find the same stable linear relationship (with cyclical variation)
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From page 28... ...
NOTE: Different scales are used for the three sectors to highlight the linearity of the electricity use-economic output relationship within sectors. Based on data f rom Edison Electric Institute, Statistical Yearbook of the Electric Utility Industry, Department of Commerce, Bureau of Economic Analysis, The .
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From page 29... ...
industrial. SOURCES: Based on data from Edison Electric Institute, Statistical Yearbook of the Electric Utility Industry, various issues; U.S.
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From page 30... ...
_ Space Heat _ Other 1950 'it/ 20% 1o% / / /7% / /8% ~7% Ret rigera~ion Cooking 496 Space Heat Televisions Air Conditionino F reezers Other 1 960 At// Lighting Water Heat Ret rigeration Cook ing Space Heat Televisions Room Air Conditioning Central Air Conditioning Freezers Drying D ishwashers Other 1970 3 FIGURE 2-8 Residential electricity use patterns, 1950, 1960, and 1970. SOURCE: Tansil and Moyers (1974~.
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From page 31... ...
However, electricity continues to make signif icant inroads in space heating and air conditioning. While about 17 percent of the total occupied housing stock today uses electricity as its primary heating source, 50 percent of new single-family housing units (and a greater percentage of multifamily housing units)
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From page 32... ...
; {J.S. Energy Information Administration (1982)
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From page 33... ...
consumed in the commercial sector, making this sector by far the most "electrified." More than one-third of commercial sector electricity is used for lighting, about one-third for air conditioning, one-fifth for space heating, and the remaining one-tenth or so for water heating and miscellaneous appliance operation (for example, cooking and refrigeration)
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From page 34... ...
Uranium enrichment operations are not expected to have an important effect on industrial electricity consul tion in the near future. Excluding electricity consumption for uranium enrichment, the average annual growth rates of industrial sector electricity demand are 6.8 percent per year from 1950 to 1960, i.
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From page 35... ...
On the other hand, the rapidly increasing share of commercial sector employment relative to output growth in that sector implies that growth of labor productivity (that is, output per unit of labor input) has been slower in this sector than in the industrial sector.
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S . Department of Conunerc e, Bureau of Economic Analysis, The National Income and Product Accounts of the United States, 1929-76, Statistical Tables; and Survey of Current Business, various issues.
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From page 37... ...
S . Department of Commerce, Bureau of Economic Analyst s, The National Income and Product Accounts of the United States, 1929-76, Statistical Tables; and Survey of Current Business, various issues.
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From page 38... ...
Industrial and commercial sector electricity intensities increased slightly in some years after 1973, but in 1983 had fallen back to their 1973 levels. In the residential sector, electricity intensity was about 8 percent greater in 1983 than in 1973, but has not shown an appreciable increase since 1977.
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From page 39... ...
economy, 1947 through SOURCES: Based on data from Edison Electric Institute, Statistical Yearbook of the Electric Utility Industry, various issues; U.S. Department of Commerce, Bureau of Economic Analysis, The National Income and Product Accounts of the United States, 1929-76, Statistical Tables; and Survey of Current Business, various issues.
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From page 40... ...
of generation. Electricity prices were also favorably affected by the stability of primary energy input costs over the period.
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41 1 1, 1 1 1 1 1 1 1 1 CO CD ~ ~ O Slop ZL6t ul 'Ode ~° Jellop Ad AMP)
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42 32 ~ 30 o o LL ~ 28 in G 26 . ~ i: \J ~ 24i 1 ~I 1 1 1 1 \/ 1~50 1960 1970 1980 1983 YEAR FIGURE 2-12 Six-SIC share of constant dollar manufacturing GPO, 1947 through 1983.
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S . Department of Commerce, Bureau of the Census, Annual Survey of Manuf actures: Fuels and Electric Energy Consumed.
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From page 44... ...
Handbook of Labor Statistics 1978, Bulletin 2000; and Monthly Labor Review, various issues.
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The 1973 change was followed during the rest of the 1970s by a sustained rise in the price of natural gas and the second oil price shock of 1979 to 1980. The electric utility industry undertook programs during this period (with federal prodding)
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From page 46... ...
S Department of Labor, Bureau of Labor Statist ics, Handbook of Labor Statistics, Bulletins 2000 and 217S; and Monthly Labor Review, various issues.
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From page 47... ...
NOTE: Price ratio calculated as ratio of actual prices in dollars per million Btu. SOURCES: Based on data f rom Edison Electric Institute, Statist ical Yearbook of the Electric Utility Industry; American Gas Association, Gas Facts; U
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From page 48... ...
As a result there are counteracting price influences on electricity demand -- in particular, electricity's own price and electricity's price movements compared with those of other energy forms. In addition, of course, there are the sizable effects on the growth in electricity demand produced by the overall growth in the
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From page 49... ...
The econometric studies summarized above show that when the price of electricity increases it tends to slow the growth of electricity demand. However, the more recent historical period over which these statistical analyses were performed also contained the counteracting influences of rising competing fuel prices, which tend to counterbalance to some degree the effect of the electricity price increases.
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From page 50... ...
Department of Commerce, Bureau of Economic Analysis, The National Income and Product Accounts of the United States, 1929-76, Statistical Tables; and Survey of Current Business, various issues.
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From page 51... ...
If the future shift were to revert to the slower historical postwar rate and the sectoral electricity intensity relationships continue to hold, then the effect on the electricity-GNP trend would be a parallel downward shift in the postwar trend line (an intercept shift) , leaving the slope coefficient intact (Figure 2-17b, line C)
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From page 52... ...
The f igure to the right depicts three possible interpretations of the recent past, none of which can be proved or disproved at the present time. Line A is a continuation of the basic long-term trend of the main f igure; line B is a continuation of the short-term trend starting in 1976; line C is a new trend line.
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From page 53... ...
In the meantime, however, the historical record suggests that the electrification of the economy will continue. Indeed, electricity use has continued to increase in all sectors over the post-embargo period while fuel consumption more generally either has been stable or, as in most cases, has fallen, as is shown in Figure 2-18.
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From page 54... ...
S Department of Energy, Energy Information Administration, State Energy Data Report, DOE/EIA-0214 (83~; and Monthly Energy Review, var ious issues .
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From page 55... ...
1984a. Statistical Yearbook of the Electric Utility Industry, 1983.
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From page 56... ...
U.S. Energy Information Administration.
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