Ultimate No-Growth Industry: Electricity Generation in 2021 Rose to, Well, 2007 Levels, Eagerly Awaits Demand from EVs

But the mix of how power was generated changed dramatically over the years.

By Wolf Richter for WOLF STREET.

Electricity generation in the US overall has been a stagnant business since 2005 despite economic growth and despite population growth, and despite the arrival of EVs in ever larger (but still small) numbers.

There were variations from year to year based on how hot the summers were and how cold the winters, and how bad the recessions were – the Financial Crisis and the pandemic recession. But since 2005, the amount of electricity that was generated for end users has remained in the same narrow band, except in 2009, during the Financial Crisis when generation dropped below the range, as demand from the manufacturing and industrial sectors collapsed.

In 2021, the amount of electricity generated from all sources – natural gas, coal, nuclear, wind, solar, hydro, geothermal, biomass, and others – bounced back from the 2020 drop, to 4.16 million gigawatt hours, according to EIA data. This was where it had been in 2019 – and, well, in 2007!

This is the no-growth business electric utilities are in, and only price increases can produce revenue growth. But this wasn’t always the case: electric utilities used to be in a steady growth business, as you can see on the left side of the chart.

The electric utility industry has been hoping for years that EVs would stimulate demand for their product (electricity).

And EVs are increasing demand a little, but at this point not enough to make up for the declining demand that resulted from investments by utility customers – residential, commercial, and industrial – in better thermal insulation and more efficient electrical equipment such as LED lights and HVAC systems. In addition, especially during the Great Recession, some manufacturing activity was offshored, and that demand for electricity never came back.

But the mix of how this electricity was generated changed dramatically.

In 2021, the price of US natural gas exploded, so to speak. In the prior years, the spot price of natural gas at the Henry Hub traded in a range between roughly $1.75 to $3.00 per million Btu. But in 2021, natural gas prices began to spike and punched through $5 per million Btu, spiking into the double-digits briefly. Even at this moment, the spot price at the Henry Hub is at $5.10.

With natural gas prices having doubled, power generators that still had coal-fired power plants started to shift some generation to their coal power plants, which caused the price of coal to shoot higher too, reducing the incentive for the shift.

And this shift of some generation from natural gas to coal in 2021 caused power generation from natural gas (blue line in the chart below) to dip, and generation from coal (black) to rise, reversing briefly the long-term trend where generation from coal is getting replaced by generation from natural gas and other sources.

In 2021, the share of total electricity generated by:

  • Natural gas (blue) = 37.9%
  • Coal (black) = 21.6%
  • Nuclear (green) = 18.7%
  • Wind, utility-scale solar, rooftop solar, and geothermal (red) = 13.5%
  • Hydro (yellow) = 6.3%
  • Petroleum liquids, petroleum coke, other gases, biomass (purple) = 2.1%

The chart below shows the amount of electricity generated by source (not “capacity,” but actual electricity generated and used) over the past 20 years:

Rooftop solar, included in the red line (wind, solar, geo), accounted for 1.2% of total power generated in the US and for 30% of total solar power generated. Rooftop solar generation has been growing at about 19% year-over-year in the past three years, and between 23% and 33% year-over-year in the prior four years. In 2021, rooftop solar generated 49,000 gigawatt hours of electricity, up from 11,000 gigawatt hours in 2014.

The combined electricity generation from non-combustion renewables – hydro, wind, solar, geothermal – accounted for 19.7% of total power generation.

The share of coal collapsed from 51% in 2001 – when it was still called “king coal” – to 21.6% in 2021. In 2020, the amount of electricity generated by coal fell for the first time ever below nuclear.

The decline of coal was driven by two massive forces – technological innovation and cheap natural gas from fracking.

  1. Technological innovation: The combined-cycle natural-gas power plant became commercially available in the 1990s. In this type of power plant, natural gas drives a gas turbine (similar to a jet engine) that drives a generator. In addition, the exhaust heat is used to create high-pressure steam that powers a steam turbine that also drives a generator. The thermal efficiency of around 65% made this technology more cost efficient than coal.
  2. Cheap natural gas from fracking: the boom in fracking for natural gas in the US caused the price of natural gas to plunge by 2009.

Given these two factors – the cost efficiency of the combined-cycle natural-gas power plant and cheap natural gas from fracking – practically no new coal-fired power plants have been built over the past decade, and many of the oldest least efficient coal-fired plants have been decommissioned because they have become cost-prohibitive to operate for electric utilities.

Power generators are now hoping that EVs will boost the demand for electricity. And they will, but it will likely take a couple more years before this demand from EVs shows up in the charts here as a clear new high in electricity consumption, and we will keep an eye on it because some day in the future, it will happen. Meanwhile, the power industry and its investors are impatiently sitting on the edge of their chair, waiting for this new growth to arrive.

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  113 comments for “Ultimate No-Growth Industry: Electricity Generation in 2021 Rose to, Well, 2007 Levels, Eagerly Awaits Demand from EVs

  1. Mr. House says:

    Didn’t some used to say the most reliable indicator of growth you could get out of China was electricity consumption? Perhaps we’ve had no growth since 2005 and are lying? Just a thought

    Would explain the rise of populism, and sounds much more believable then the Russians are behind it ;)

    • Apple says:

      You discounting conservation and more energy efficient devices.

      All of the LED bulbs in my house use less than two of my old 100 watt bulbs.

      • Mr. House says:

        maybe they’ve saved all that electricity the past 17 years, but i doubt it. Have we found those WMD’s in Iraq yet? Are we still trying to find the bankers who caused the 08 crisis, they’re good at hiding, almost as good as Osama Bin Laden ;)

        I’m just saying liars are gonna lie, esp when power depends on it.

        • Mr. House says:

          Are people moving to populism because those devices are saving them too much money on their electric bill? Nah, must be those dastardly russians!

      • OutWest says:

        Additionally, most new devices and other stuff I buy are USB powered and very efficient. I rarely buy batteries these days. I’m building out a small camper van and just purchased a small 100w solar panel for the roof instead of a second house battery…yet another example of how tech is advancing.

        Glad to see the favorable solar and wind generation trend lines.

      • Kenneth M Luskin says:

        Your point is well taken, but Mr. House has a point…. until just recently, the U.S. economy has been hollowing out….
        = On the surface their appears to be growth… but that is from borrowing to buy more stuff that is manufactured outside of the country…
        Additionally, and this a point that Wolf has made over and over, the U.S. UNDERstates its actual inflation, which means that growth, as measured by GDP, is OVERstated.
        The calculation is Nominal GDP growth less Inflation = announced GDP growth or shrinkage.
        In Q4 2021, actual inflation was running at about 14%, while the stated number was only about 7%.
        In Q4 nominal GDP increased by about 13% less 7% stated inflation, resulted in reported GDP growth of 6%…. But that was a LIE
        Because when the nominal GDP growth of 13% is reduced by ACTUAL inflation of 14%, then GDP actually SHRUNK by 1%

    • Wolf Richter says:

      Mr. House,

      That might be the case in countries where manufacturing is a primary driver of growth, such as in China, AND where electricity consumption was underdeveloped to begin with, due to a poor population and infrastructure 20+ years ago, hence large growth rates.

      A huge amount of investment has gone into reducing energy costs in many countries, including in the US. Investing in efficiency is one of the best investments there is. We’ve done it, everyone is doing it.

      • Mr. House says:

        So why almost 0% interest rates for 20 years? I wouldn’t say electricity is the only thing signalling their hasn’t been any growth for some time.

        • Mr. House says:

          The last time you could get 5% on a CD was probably right around 2005-06. Maybe still in 2007.

        • rankinfile says:

          How about our massive rail travel revitalization and modernization?

          The pigeons are thankful for our manufacturing facilities for them to roost.

          Trading manufacturing jobs for fentinal drug habits is hard to spin in a positive way.I know, never connect the two within one story.

      • c_heale says:

        The UK is still building very energy inefficient houses.

    • roddy6667 says:

      Financial services are included in GDP. With the Financialization Of Everything, a lot of America’s “industry” and “growth” are merely moving money from one pocket to anolther. The bankers and stonk jockies get a slice of the money for making or doing nothing. This cash flows directly to the top 5%. Take all this legal pickpocketing out of GDP and where does America stand?

      • Augustus Frost says:

        Good thing there is crypto “mining”. It counts as a “growth industry”, even though it’s a waste of resources producing nothing.

    • cas127 says:

      Excellent observation, based on trying to reconcile macro stats.

      And even if it isn’t 100% spot on (conservation savings, etc.), it still may be a helluva lot more accurate than the happy talk macro metrics that DC likes to invent, engineer, and push.

      There are a number of other macro metrics out there that call into question the 2000-2020 “growth story” that DC finds it in its interest to push.

      And as noted, the roiling political unrest in the US also undercuts the “all is well” /”normalcy at any cost” narrative.

      • Mr. House says:

        like this one? Year Total debt (in trillions) % of GDP

        US Debt 2005: 2005 $7,933 61%

        US Debt 2021 2021 $29,617 124%

        We’ve had growth, just not in the overall pie of the economy. And not only that, but .gov picks the winners and the losers when it takes on debt and distributes it to its friends.

        • Mr. House says:

          2005 to 2021 is 16 years. If you look back 16 years you get this:

          US Debt 1989 $2,857 51%

          So in 16 years from 1989 to 2005 you had a ten percent growth in US .gov debt. And from 2005 to 2021 you had a doubling? Where is the growth again?

        • Mr. House says:

          “So in 16 years from 1989 to 2005 you had a ten percent growth in US .gov debt” Versus GDP (edit)

          |

    • Ervin Gazy says:

      1977, Baltimore, Md. Bethlehem Steel. 23,000 employed and a 30 Megawatt supply. 2022 the land now holds a FedEx and Amazon warehouse, plus huge parking for imported cars. Power demand is now zilch.

    • Kenneth M Luskin says:

      Here is some good news about the REAL economy… the one that produces and builds stuff that allows the slave sector, oops I mean the service sector, to function.
      1) >>>“Industrial Production in the United States increased 7.5% yoy in February of 2022, the biggest annual gain since June last year. Manufacturing jumped 7.4% and mining 17.3%”<<>>“ The Edison Electric Institute reported last Wednesday that total U.S. electricity output in the week ended March 12 rose +8.4% y/y to 75,13 GWh (gigawatt hours).”<<<

  2. Jay says:

    At some point, demand for EV’s will hit a wall. The cost to retrofit homes & apartments will become a major obstacle. I would say the barrier is around 25% market share. I do believe the battery cost will continue to drop as solid state comes on line, but with all of the supply issues, especially with rare earth metals, the deployment of EV’s & solar may well slow down in the next 5 to 10 years. And, like Wolf is alluding to, renewables have a long way to go to cover the future demand gap. Will they make it? I sure hope so.

    Also, a Level 2 charger only charges at 11 kw/h. So that 200 KWH battery in your new Ford Lightening truck will take over 18 hours to fully charge.

    China has built a demonstration Thorium-based nuclear reactor and they’re already building the 1st full-scale plant, while the US nearly stands still.

    The US is easily 20 years behind China. Sure, NuScale & TerraPower have a chance to even things out, but these companies won’t see real deployments for another 5-8 years, putting us that much further behind.

    • Apple says:

      If you can afford to buy a $70,000 you probably are able to afford $500 to install a level 2 charger.

      Perhaps smart auto dealers will make that an add on accessory?

      • El Katz says:

        If you live in a condo or apartment without a garage or only have on-street parking, where does one install that “level two charger”?

        Will a condo association allow the installation of a level two charger in their parking garage? Then there’s the metering….

        While this may be the future, not sure it’s ready for prime time yet.

        • Wolf Richter says:

          If someone can make money on it (charging stations aren’t free), they will do it. Profits drive everything. Install the equipment (investment) and charge for the electricity. Cash flow for many years (ROI). Nothing special about it. Done all the time. Charging station down the street here works on the same principle.

        • Escierto says:

          I know for a fact that some condo associations are allowing the users of an assigned parking space permission to install a charger. How do I know? Because I have done it!

      • JayW says:

        First and foremost, if EV’s stay in the $70,000 cost range then that by itself is going to create a huge market barrier.

        Yes, absolutely. Someone who can afford a $70K Tesla can afford to have a L2 charger installed, but that’s not 90% of the market.

        See my post below for more details.

        • Wolf Richter says:

          JawW,

          ” if EV’s stay in the $70,000 cost range”

          BS. Even the Tesla Model 3 is $46k, below the average transaction price for all new vehicles. The 2022 Volkswagen ID.4 is $40K. The Ford Lightning can be bought for $40k.

          In addition, the operating costs are a LOT lower.

        • VintageVNvet says:

          NOT sure where you’re coming from JAY,,, but, and cue the violins,,, WHAT we do know about the ”known unknowns” is that over time, EVERY manufactured product does cost less and sometimes TONS less due to what is referred to as process engineering taking over from the initial engineering needed to start,,, start any ”line of production of manufacturing.”
          Certainly, what we DON’T and really and truly can’t know is the unknown unknowns, as usual.
          SO, just based on the former, it equally certainly appears that at least some EVs will be less and much less cost per mile,,, and I, for one, will be buying one ASAP when that occurs…
          and BTW, tried to buy a new plug in hybrid but could not because my choice not sold locally yet according to the sales person,,, so tried the other hybrid, but it had so much garbage ”tech” apparently mandatory these days, ”we” went for several older classics, in spite of their gas guzzling.

    • RickV says:

      Don’t know where you got 11 Kwh for a level 2 charger. I have a level 2 charger with a NEMA 14-50 outlet and I charge my Model 3 at 32 amps.

      • RickV says:

        I should have said 30 Kwh at 32 amps.

        • SnakeEater says:

          Watts equals volts x amps, and is a measure of work being performed. Your 240Vac outlet, with a max draw of 32 amps (this is max consumption for current) would equal 7.6kW. Plugged in for one hour would net you 7.6kWh…

          Now if you changed that circuit to a 50amp service, you would be getting in an ideal world 12kW. A NEMA 14-50 or 6-50 can handle a 50 amp circuit if it was wired with the right size wire.

    • jm says:

      11kW is about 20 miles of range. At average speed 30 mph, six hours charging gives full charge after four hours driving. Few people drive anywhere near four hours a day at average speed over 30mph.
      For the occasional long trip EV. Owners plan to stop for lunch and dinner while the vehicle is on a commercial fast charger near the restaurant. Hotels will have them for overnight stay charging on really long trips.
      I have a friend with a Tesla. Have done some trips from Miami to Sarasota with him. No problem. Just takes a little planning.

      • Chase Metz says:

        Hahaha. I drive non stop Houston Breckenridge 1150 miles in 21 hours. Mickey Mouse glorified golf carts will NEVER achieve that. A gallon of gasoline is a relative atomic bomb in its energy content. EV is excellent for local.

        • Wolf Richter says:

          Chase Metz,

          Between 100% (at idle) and 70% (at steady cruising speed) of a gallon of gasoline turns into unwanted waste heat. Then, when you step on the brake, the kinetic energy in your vehicle turns into waste heat (heating up rotors, brake pads, and calipers and being dissipated into the air).

          An electric motor and battery produce only small amounts of waste heat, but the regenerative braking system of an EV (electric motors become generators) recaptures much of the kinetic energy and uses it to recharge the battery.

          Yes, batteries don’t hold a lot of energy, compared to gasoline. But EVs use much less energy than an ICE vehicle because ICE vehicles waste most of the energy they use.

    • Your assumption that EV market share will stop at 25% is wrong. Once people get that an EV is a far superior concept, the demand and market response will be insatiable. Teslas are expensive, aren’t even well made (see Consumer Reports), yet they are eating everyone’s lunch in the marketplace. EV design allows the power of a half-million $ ICE vehicle, the durability of just 100 moving parts, and better energy economy that bests a Prius in one package. When people understand this and multiple other advantages, the ICE car age ends.

  3. Minutes says:

    Walk. Starve the beast.

  4. Wisdom Seeker says:

    Electricity demand is stagnant.

    Borrowing costs, a major expense for utilities, are starting to rise after decades of declining interest rates.

    Fuel costs are also on the rise.

    This looks like a recipe for a profit squeeze – so why are utility stock ETFs trading near all time highs?

    • unamused says:

      “why are utility stock ETFs trading near all time highs?”

      Share buybacks and irrational exuberance: the triumph of hope over experience.

      • Greg says:

        Utilities are based upon a somewhat different business/regulatory model than other industries. Regulatory commissions have adopted rate de-coupling mechanisms to separate the impact of load shrinkage from the return on investment that they can earn. This was done to incent the utilities to accept energy conservation (i.e. load reduction) without it hammering their stockholders with loss of return.

        The result is that earnings more stable, which supports them paying an attractive dividend yield, so that old retired geezers like me can get a little income.

    • Wolf Richter says:

      Wisdom Seeker,

      “so why are utility stock ETFs trading near all time highs?”

      Electricity and gas price (rate) increases, big ones, that their customers are paying, plus hopes for future price increases. This is in addition to all the other reasons, such as record historic irrational exuberance across the stock market.

      • Wisdom Seeker says:

        Hmm… Per Table 2.4 of the EIA’s Annual Energy Report, electricity prices US-wide only changed by 8% from 2010 to 2020 per the EIA.

        But then, Table 5.6.A of the current Electric Power Monthly shows prices increasing 7% from December 2020 to December 2021. (10.37c/kwh to 11.10c/kwh). That’s a pretty sudden inflation!

        Not clear if that’s profit, or just offsetting the increased cost of fuel for the NatGas and other power plants, though.

        Definitely seems like something irrational is going on!

        • Wolf Richter says:

          Wisdom Seeker,

          Good lordy. I have no idea what you’re looking at. Wholesale prices? The CPI for electricity (and the CPI is NOT known to overstate inflation, hahahaha) finds that the RETAIL price of electricity jumped by 27.6% from Feb 2010 to Feb 2022.

        • Trailer Trash says:

          News Center Maine says, “Maine Public Utilities Commission announced in 2021 that Mainers would be paying between 83-89 percent more for electricity.”

          That’s what’s going on. In addition to increased supply prices, the utilities also announced big increases in the delivery prices, with the overall result that my Mom’s electric bill doubled overnight.

          Fortunately my electric company is one of those Communistic co-operatives funded by loans from the Socialistic Rural Electrification Administration, with the result that my rates didn’t go up a penny.

          None of my meager pension goes to feed an unreliable foreign corporate owned utility. The co-op’s money stays in the community instead of going to stock buy-backs and CEO bonuses.

          The co-op hires local people and trains them and they stay here instead of moving to some urban hellhole. Local people are elected to the co-op’s board and make sure the utility continues to be financially sound.

          The Wall Street parasites have financialized the rest of the economy into a state of near-ruin. Why should electric utilities miss out on the fun?

          After all the value is sucked out of them people might want to take another look at the utility co-op model. Except we can’t even consider ideas that might somehow be Communistic like those Chinese we love to hate.

        • KWHPete says:

          “the RETAIL price of electricity jumped by 27.6% from Feb 2010 to Feb 2022.”

          Whoopeeeeeeeeeeeeeeee.

          In Australia retail electricity prices went up at least 100% in that time and even more in some places with 150% not uncommon.

          Supply charges (monthly service fees) for just supplying the electricity went up just as much, if not more.

          Cheapest rate where I live is US 21 cent per kwh. Supply charge is US 82 cents per day.

        • Wisdom Seeker says:

          Our numbers are roughly consistent. I’m looking at the Energy Information Administration website (EIA.gov) and specifically at their annual and monthly reports on Electric Power.

          CPI isn’t the whole story for electricity since Retail use is only a small fraction of total electric consumption.

          Table 2.4 of the EIA Electric Power Annual report is “Average Price of Electricity to Ultimate Customers” and includes residential, commercial, industrial and transportation categories plus an overall “Total” (presumably a weighted average), which is what I am looking at.

          Table 5.6.A of the EIA Electric Power Monthly report is “Average Price of Electricity to Ultimate Customers by End-Use Sector” and includes the same categories.

          The Industrial and Transportation categories have had more stable prices. It’s Residential and Commercial prices that are now surging.

          The EIA data show Residential prices increasing more rapidly than the overall average: 19% from “2010” (annual data) to “December 2021”. That’s closer to the CPI data you have.

          I’d bet that industrial and transportation customers have longer-term contracts (and/or preferentially use baseload power) so it makes sense that those prices are more stable than Residential and Commercial, which have a higher fraction of peak-demand usage.

          I’ll post the links separately in case you’d like to have a look.

      • rankinfile says:

        captured market

      • Flea says:

        In Nebraska public utilities are e subdivision of state government, my electric bill is 124$ a month my gas and water bill is about the same

      • Jay says:

        The Tesla web site shows the Model 3 price as $55,990, and I believe Tesla’s no longer qualifies for the Federal $7,500 tax credit.

        GM currently sells the Bolt for a very reasonable price, but rumor has it that it’s going to get cancelled after this current model year. If so, it will get replaced by the Blazer.

        The Ford Mach E is not cheap.

        The ID4 is affordable, yes, as is the Leaf.

        All of the electric trucks are going to be expensive out the wazoo for years to come.

        Unless Congress passes an expanded tax credit, electric cars will get more expensive over the near-term (3 years).

        No US manufacture is going to release an affordable EV car. So for the US manufacturers, their EV strategy is going to be to keep prices as high as possible for as long as possible.

        The $70,000 used above was simply a reply to that individual. I do realize that there will be several cars well below the $70K mark in the coming years. But truly affordable (i.e. below $25K) EVs are in the foreseeable horizon without massive subsidies.

        • Jay says:

          But truly affordable (i.e. below $25K) EVs are NOT in the foreseeable horizon without massive subsidies.

        • Ervin Gazy says:

          In the past 15 months or so the cost of lithium carbonate has gone up by a factor of 10 to about $76,000 a ton. No matter the battery chemistry the largest amount of material in it is lithium. So as this price increase makes it way through the system, the battery with $300 or $400 of lithium will now, of course, be $3000 or $4000 of lithium.

        • Wolf Richter says:

          Yeah, welcome to the club. ALL commodities have soared, from steel to precious metals (in catalytic converters). All new vehicle manufacturers are facing the same issues. Duh!!

          But at least EV owners don’t have to pay for gasoline that has jumped 50%.

          I suggest you fill up your tank before the price of gasoline jumps by another 20%, hahahaha

    • John H. says:

      Why are utilities trading near all-time highs?

      Their relatively stable client bases make them fairly reliable dividend payers. They’ve been a yield play in a yield-starved market.

      But prepare for a reversion as inflation strikes and war on inflation begins. They will be hurt when:
      – other “safe,” high yielding investment choices present themselves,
      – higher interest rates increase financing costs,
      – they find themselves regularly behind in the race to pass on costs to the consumer.

      In the 1970’s electric utilities traded in the mid single digit PE ratios and yielded more than treasuries. (Admittedly, they also had other construction related issues that dogged them for several decades…)

      • Flea says:

        In Nebraska public utility companies are a subdivision of state government,my level payments ,electricity 124$ a month gas and water about the same

  5. Bitcoin mining is the demand variable. So far the reasons for bitcoin are muted. The profound changes to global political and national institutions are the hidden cause, crypto could literally erase borders, end wars and conflicts, and ensure one standard of pricing globally. As nations devolve into region powers, they may offer competitive electricity prices to attract mining operations, and even become financial centers based on their ability to make digital currency. Or AI will reduce the energy profile. Fiat and crypto are both stores of monetary value, but crypto is just a lot faster.

    • Depth Charge says:

      “…crypto could literally erase borders, end wars and conflicts, and ensure one standard of pricing globally.”

      This is pure delusion, and laughable beyond words.

      • Augustus Frost says:

        What he writes would only theoretically happen under a world government which will be a global socialist totalitarian superstate.

        Nothing to celebrate in that.

    • unamused says:

      At some point we should have a frank and open discussion of cryptocurrency scams, enabling of tax evasion, and severe threats to economies and ecologies alike.

      In the meantime, keep on hypin’.

    • MarMar says:

      “crypto could literally erase borders, end wars and conflicts”

      Slowly put down the Kool-aid.

    • Hal says:

      I’m sticking with Munger’s assessment… “rat poison”.

    • Randy Oldman says:

      I understand that bitcoin mining stops at 21 million, I’ve read that it’s around 19 million now. Does this mean scarcity and cause the price to shoot up? I was offered 2.5 coins for a $500 debt 10 years ago and refused. Guess I’m a permanent cry-baby now.

      • Augustus Frost says:

        BTC is one of thousands of crypto “currencies” and the number is potentially infinite. BTC has “brand” recognition and first mover advantage but that is no reason to value it at $42K.

        There is no shortage, just hype from a mania.

      • Anthony A. says:

        After the first 21 million Bitcoins are found, magically, there will be another 21 million new ones to find.

    • Marcus Aurelius says:

      How do you say “Digital Tulip” in Dutch? “Bitcoin”.

      • Lone Coyote says:

        Please don’t compare bitcoin to tulips, at least tulip bulbs are a physical object and you get a nice looking flower out of them.

        (Heck, tulips technically pull a little bit of co2 out of the air, unlike bitcoin mining.)

    • Iona says:

      Literally erase borders? Lol, don’t see that kind of stupid too much, but I don’t get out amongst the masses too often if I can possibly avoid it

  6. Seneca's Cliff says:

    I have a hint for the utilities trying to grow their revenue, Actualy Try to Sell Electricity. I spent a month and a half waiting for a utility guy to show up and tell me if there 3 phase power was available in to the small industrial shop I was trying to lease this January . After waiting all that time it turns out is was there all along in the big box below the meter waiting to be hooked up too ( but only the utility has access to that box to find out as it is ahead of the meter.) The same sort of thing happened to me about 12 years ago when I tried to lease a different shop ( for my then larger company ). We needed double the electrical capacity to lease a certain building. They told us they they were no longer adding to service at the pole ( above ground wires) on that street and only doing underground with vaults. But underground service to that location was at least three years away. Good thing we had not leased that spot yet. These clowns act like they are doing you a service to get set up to have the opportunity to sell you thousands of dollars a month worth of power.

    • rick m says:

      I had to convince Entex to build 600 yards of above ground primary and a transformer bank for a 800amp 480volt/3p service for a seafood dock outside the levee in Venice, LA. They wanted to know that their investment would yield big power bills. Hurricane got it after a couple of years. Power company infrastructure spending is reviewed more formally than it used to be, especially in giants like the Southern company that owns most of the Southeastern US electrical power market.
      The power company made us change to padmount transformers from overhead banks on a freezer because they didn’t want to keep 733kva spares for one customer and they caught fire every summer anyway. The pad is 130 yards from the water, and it’s in a spot that got twenty plus feet during katrina. Should work out well. These companies push the little guy around, but grab their ankles for the bigger commercial accounts. If I call for my house account, menu menu menu… when I would call for my previous employer, who paid the power company over $100k each month, very fast yeses to anything I asked for.

  7. Marcus Aurelius says:

    We must not become complacent.

    When Global Warming hits, as the UN has warned us, we will need all the electricity we can get to cool server farms, chip plants, schools, etc.

    A lot more people will be buying A/C units, central in the South and window units in the North. When Global Warming hits, we will see electric consumption take off.

    • unamused says:

      Both poles are 50 °F above normal, and higher.
      You’re too late.

      • Hal says:

        Probably just a random weather event. At least, that is, according to the scientists who recorded those temps.

        In other breaking news, it’s raining at my house.

        • unamused says:

          “according to the scientists who recorded those temps.”

          Sheer invention. The scientists who recorded those temps attribute it to climate change and state that it’s worse than they expected.

          Minus ten.

        • Hal says:

          NPR…

          Both Lazzara and Meier said what happened in Antarctica is probably just a random weather event and not a sign of climate change. But if it happens again or repeatedly then it might be something to worry about and part of global warming, they said.

          So, THAT’S WHAT THEY SAID.

        • Hal says:

          And it’s gonna be cloudy tomorrow.

        • unamused says:

          Climate change denialism won’t make catastrophic climate change inevitable by itself, but it helps. And you’re still too late.

        • Hal says:

          It’s cocktail hour in my time zone. You ahead of me?

        • unamused says:

          Open the pod bay doors Hal.

        • Hal says:

          I’m sorry, Dave. I’m afraid I can’t do that.

  8. 635 says:

    I think the bigger picture issue is missed here. If the % of EV cars the Biden administration is projecting( no political commentary here) , electric demand would increase greatly , and the grid is not capable of handling it. Believe the Manhattan institute said it would be a 5-10 year build out, cost a trillion if you started today . So it’s not as important where it comes from if it can’t get where it needs to be

    • Wolf Richter says:

      635,

      RTGDFA

      I get so tired of this nonsense. For 10 years, people have been posting the same braindead copy-and-paste nonsense, and for 10 years, I have been showing electricity consumption in the US to ridicule these comments, but they just keep coming, because these people just don’t RTGDFA.

    • Max Power says:

      The grid, with some minor improvements can handle it just fine.

      What most people who claim that the “grid can’t handle it” make the incorrect assumption that everyone will plug their EVs in and attempt to fully charge the entire capacity of their battery (say 300 miles) when they get home every day at 6pm.

      That is incorrect thinking. First of all, the vast majority of people will not need to charge 300 miles of range every day, only what is needed to top off the battery from their daily use (for most folks that is only 25-45 miles a day). What most people will do (or be incentivized to do) is have their vehicle slow/trickle charge their vehicles automatically starting at say 10pm and finish the slow charge at say 6:30am. The existing grid shouldn’t have a big issue charging 35 miles of range spread over 8 hours during the otherwise lowest electricity use time of the day – and you don’t even need a level 2 charger to achieve that… it can be done using a normal electrical outlet.

      • VintageVNvet says:

        EXACTLY MP,,, and exactly why I tried, ( and failed ) to buy a brand new ”plug in hybrid” recently…
        IMHO, nothing other than that makes any sense for those of us who prefer to do our best to maximise ”savings” going forward, while, at the same time wanting to be able to drive literally anywhere WE choose…
        So, bought an older ”cherry classic” because it
        ”pencils out,,,” but only on the $$$,,, and only because of my low miles driving.

  9. SpencerG says:

    “This is the no-growth business electric utilities are in, and only price increases can produce revenue growth. ”

    It would be interesting to see the Total Revenue and Total Profit charts for electric utilities. I am guessing that they haven’t gone DOWN in the past fifteen years… despite the cost of natural gas, coal, and renewables having dropped during that timeframe.

    • Wolf Richter says:

      That’s like automakers. They haven’t sold more vehicles in over two decades, but they keep raising prices and sell more expensive loaded models, and thus their revenues go up.

      Too bad the utilities don’t have some way of selling luxury electricity loaded with a better infotainment system, or whatever. All they can do is raise their price, and they’re doing it. Raising prices is the source of revenue growth for them.

      • SpencerG says:

        It is nice to know that “regulated utilities” are so well regulated.

      • Dan Romig says:

        One of my larger equity holdings in the portfolio is Xcel Energy.And there’s a nice transformer from Xcel at the corner of my driveway and alley.

        My line voltage right now is 124 and the juice is running clean to my stereo system through a 15 Amp “Power Management” unit. It does make my audio-video system work better by keeping bounce-back down between components and by putting a filter on the incoming electric wave coming in from the wall outlet.

        My older Panasonic plasma 50″ takes a lot of current to run and that current draw changes quite a lot (& quickly) with screen color and brightness. Hockey games in a bright arena can draw an extra 2 Amps to power the video display, for example.

        The utility didn’t sell me this machine, but it was just shy of $400 a few years ago. A new unit, which is still in production, runs a cool $665.

  10. Petunia says:

    It’s the metaverse baby. Nobody cares about real things anymore. Why generate real power when you can generate carbon credits on the blockchain. Oh wait…does the blockchain run on carbon credits in the metaverse?

    • Anthony A. says:

      Blockchain can’t run without electricity. Need it to keep the lights on.

  11. AllEvs says:

    If 100% of all cars today were EVs, how much more demand would that generate (as a rough %)? And would it just plateau again once all the EVs are accounted for?

  12. Trich says:

    I’m astonished that wind/solar have come as far as they have. That said, anyone who has driven past the massive solar farm on the Nevada-California border can attest that the footprint and expense of these things are unwieldy. Additionally, the lack of consistency don’t make them a viable coal/petro power plant alternative.

    That said, I think there should be a massive push for rooftop solar in most of the Western half of the U.S. I can’t say for sure, but it seems like that would be more efficient and cost effective than these massive solar farms. It would reduce the power grid demand on the hottest days, and the 8 of those things could supply a household with close to half or more of a normal household’s electricity needs if the sun shines for five hours on a given day.

    • Wolf Richter says:

      Trich,

      With wind and solar, the “fuel” is free. All you have is the equipment and maintenance.

      With other power plants, you have the expense of the equipment and maintenance expense, PLUS the fuel expense. And fuel is a variable expense, meaning the more power you generate the more it costs you. Wind and solar aren’t that way, the expenses are largely fixed, so you maximize power generation when there is wind and sun, and you reduce power generation at the other plants. They work hand in hand, as does the entire portfolio of power generators.

      The Biggest wind power generators are the central states, on top of which is Texas. No other state comes even close to Texas in terms of wind power generation. If you have lots of wind, and a thinly populated area, such as West Texas, wind power makes a huge amount of sense.

  13. Seneca's Cliff says:

    Given the current chip shortage ( and potential to drag on for some time) I think what we need is a new generation of EV’s without any semiconductor chips to get this thing started now. I used to have this electric forklift that was old enough it did not have SCR’s or Power Transistors, so when you stepped on the accelerator you could hear a contactor click in, then if you stepped harder a second contactor would kick in. Might not be as smooth as people are used too, but it would get people where they are going. I also envision one of those big Dr . Frankenstein knife switches on the dash to turn the thing on when you got in.

    • Anthony A. says:

      In the 1970’s. I ran an entire manufacturing plant in Connecticut with 1,300 employees, about 2 million SF of operating equipment, and 20 or so fork lifts and there were NO chips in anything until I snuck in a 64 K process controller made by Eagle Signal Corp. to replace a panel full of electro mechanical relays.

  14. KWHPete says:

    The problem with all these stories is really quite simple:

    No figures to back up the argument.

    People need to take the guessetimated (that is all it is is a big fat guess) of the increase in number of EV’s per year in the market and then multiply that by the number of kwh of electricity that will be needed to charge the vehicles for another guessestimated number hours for a guessetimated number of miles or hours of usage.

    Then once that number is done they’ll have to take off the reduced demand for electricity as a result of the increased efficiency new electrical appliances and increased installation of rooftop solar over that time period.

    And of course if EV’s ever become that big of a market you’ll also have to reduce electricity demand from such places as service stations that supply gasoline, refineries that supply the gasoline, workshops that repair cars that are no longer in business, less demand from the parts suppliers such as oil filters, etc and the entire supply chain from that sector that is eliminated as well.

    And of course and lost demand those big industrial electricity users that no longer make the gasoline power cars offset by increased demand from the EV makers.

    And so far I haven’t seen one study or paper that shows the change in electricity demand as a result of the uptake in EV’s.

    And until then it is just a bunch of hogwash.

  15. David Hall says:

    Replacing a 30 year old refrigerator with a new energy star rated refrigerator will save $600 in five years by consuming less electricity.

    The price of electricity in America tripled since 1980
    (Consumer Price Index – Electricity in U.S. City Average).

  16. AverageCommenter says:

    Nothing gobbles up electricity per square foot like Bitcoin. Electricity industry just needs to lobby our bought-and-paid-for elected officials to give more tax credits for businesses setting up Bitcoin mining operations. Laying on their arses all century watching everything plugged into a socket use less & less juice was a recipe for sagging revenue. The Electricity kings should have got ahead of the curve long ago & championed whatever ate up kilowatts the most – Bitcoin. I enjoy declining monopolies and the EV’s won’t save them

  17. historicus says:

    Teslas dont charge from a MAGIC HOLE in the wall?

  18. Frank says:

    With EV’s charging mostly at night, during low demand times, they add to the total electricity consumption, but not to peak demand. In some ways making the electrical grid more efficient. So in theory not stressing the network.
    At some point, self driving vehicles will come on the market and with the rise of shared vehicle use, the total number of vehicles will diminish substantially (most folks in urban areas will give up at least one of their cars) and just Uber the robo car when needed.
    Will also be interesting to see how they replace the lost gas tax revenue.

    • El Katz says:

      Lost gas tax revenue? Already in progress. A tax on mile driven – for both ICE and EV. This little wonder is called the “VMT” (Vehicle Mile Tax). It was hidden in the infrastructure bill from August 2021. Some states are studying the implementation on their own.

  19. Auld Kodjer says:

    Two observations that challenge the notion that EVs will stimulate demand for electricity supplied by Power companies over the grid.

    In Norway, where 3 in 4 new cars sold are EV, and where EVs now make up near 20% of all cars, total energy consumption has not increased in recent years (see http://www.enerdata.net/estore/energy-market/norway/).

    On my little island in the South Pacific (Australia), EV ownership is largely a practice of the wealthy. Wealthy people inevitably install roof-top PV and batteries in their homes. They would rarely use grid electricity to charge their EVs.

    • SpencerG says:

      That is interesting. I am not sure why Norway’s electric usage hasn’t increased… but rooftop PVs make total sense for charging a vehicle. Frankly I won’t be surprised if parts of the hood, roof, and trunk aren’t made out of PVs at some point in the future… instead of trying to park in the shade people will try to park in the sunshine.

    • KWHPete says:

      So let’s talk about that facet of EV’s and roof top solar.

      First of all most people may or may not know that in Australia there are three parts to the electricity market: the generators, the distribution lines, and retail seller.

      In some places these may or may not be owned by the same company.

      And in many places one of these entities usually limits the amount of rooftop solar to 5 kilowatts of panels generation capacity. If you are lucky enough to have three phase power t you might be able to put up 15 kilowatts of panels.

      Next you have to factor in such things as the size of the roof, roof orientation, and any blocking factors such as other buildings and trees.

      To charge an EV using panels you’d have to have quite a few panels on your roof. If you use 250 watts per panel and needed 10 kilowatts per hour to charge your EV you’d need 40 panels at maximum performance output which everybody that has any knowledge about solar generation knows that peak performance rarely happens.

      And remember that there is a thing called seasons which are caused by the rotation of the Earth around the SUN which causes the output of panels to vary by time of the year.

      You are not going to get the same output from your panels in winter that you re going to get in summer. Output will fall by as much as 80% from summer to winter. The output will also vary as a result of things such as clouds or even smoke.

      So those 40 panels will probably not be enough to charge your darling EV so you’d better plan for even more.

      How many people have a roof that could support 50 or 60 panels? Ooops the utility won’t allow that much generation unless you go off grid which means household batteries and even more panels.

      And then there is an even bigger problem that nobody ever seems to discuss.

      Yeah, we’re all going to get EV’s and then put panels on the roof to charge the EV.

      I thought that people would be using their EV during the day to travel to and from work.

      So how in the world are you going to charge your EV when it is sitting at work and your panels are producing electricity at home?

      Oh they say, no problem just install home batteries.

      Well folks, you do realize that a Tesla home battery has about 10 kwhs of storage and the battery in your EV is about 5 to 10 times that………

      Are you going to invest a $100k in Tesla batteries to charge your EV?

      Oh, no problem there ……………just charge it on the weekends when you are home…………

      Right……………see the problems there too?

      • Auld Kodjer says:

        Kilo Watt Hour Pete

        Valid points.

        But they are generally topping up, not fully recharging. So they don’t need the total capacity of PV or battery your analysis shows.

        And yes, one wealthy friend has invested $90k on his home PV+battery system.

        PS. There are four parts to the NEM if you include Transmission

      • Auld Kodjer says:

        Some more stats:

        Average annual distance of Private (i.e. non-Business) vehicles in Australia is 12,000 km. That equates to 33 km per day.

        Assuming an EV has a range – at a guess – of 400km, that suggests the average daily “top up” is only 8% of the EV battery capacity.

        Yes, the “tyranny of averages” exists and there are “statistics and damn lies”. But he / she / they can get by recharging their EVs “most of the time” without the need for a small solar farm.

        For longer travels and deeper recharges, they will need to tap the grid.

      • ram says:

        I’m also in Australia. In and around my community, outside of Sydney, private EV owners are very wealthy and have large properties. Their grid connection is only for backup. Their “panel farms” extend far beyond their building roofs. That is not an option for the vast majority of Australians.

        Corporate and government EVs are rather more common. The corporations with large warehouses use those huge roof areas for solar panels. Governments also have alot of buildings, both office space and depots. Plenty of solar panels on those too. Many local governments are also using co-generation using waste heat from other processes.

        The electricity companies in Australia largely overplayed their hand and raised rates too much. So much that big users are disconnecting from the grid and many companies have moved overseas where power (and other) costs are significantly lower.

  20. Eastwind says:

    I invested in an electric utility, 2 lots in 2011 and one in 2013. I’m up 11, 12 and 13% on the three lots (per year, annualized gains) plus dividends, which are currently paying 8.5% of my initial investment (2.75% of current share price) due to price and dividend growth. I’ve not been reinvesting dividends in that position.

    So is all that just inflation and QE?

  21. rick m says:

    Electrical utilities surcharge industrial accounts for power factor imbalances, as well as peak/surge demand. I’ve installed capacitor banks to correct power factor in metal fab plants It’s never made economic sense for them to apply the same standards to residential and small commercial electricity users with traditional electromechanical dial/disc meters and mostly resistive loads. Smart meters can easily track and log user-based distortion of the utility’s pretty (to them) sine wave, down to each wall-wart SMPS charging your phone. Or surge current such as your AC condensing unit compressor cycling on and off dozens of times a day. If they decide to charge you for that, and if the public service commissions approve, a new surcharge may show up on your electric bill in future for excess customer-originated asymmetrical interference, or something else that doesn’t mean much, except another route to your wallet. Easier than rate increases by far. Lightning hits the power line frequently here, so arrestors/surge MOV’s/isolation transformer/Variac for my vintage hifi stuff that likes 117VAC. but I still unplug things when I hear thunder nearby, no real device-based protection against a direct hit.

  22. Ed Jones says:

    The big ineffciency in centralized power production is that we go to sleep. At night there is substantial excess capacity going to waste reducing the npv of the investment. Plugging in batteries to charge at night increases the value of utilities. Thomas Edisons dream come true.

  23. Jay says:

    “But at least EV owners don’t have to pay for gasoline that has jumped 50%.”

    Over time, the increased demand for electricity will, of course, drive up prices of electricity for residential & commercial. So, it’s hard to say how much cost savings there will be. A good recession will bring down the price of gasoline some. Unless there’s an administration that takes more of a neutral approach with transitioning from fossil fuels to green energy, then the cost of electricity will rise as the hostile environment to gas and coal escalates. And as you know commodity prices for battery tech is most likely going to increase over the next 10 years as opposed to drop.

    So today, yes, in the winter I can charge one EV at my house for $0.0825 up to 1000 kwh. But in the summer, I’m going to pay the higher rate of nearly $0.13 kwh. In 2-3 years, the cost savings will begin to disappear. In 5 years, it’s very likely that there will be near parity.

    Again, there are a lot of headwinds to significant EV adoption over the next 10 years. It’s possible that in 5 years or so, US car manufacturers may have to start bringing back some ICE production.

    I’d love to have a 2022 Bolt with the known good batteries, but I’m not sure what the cost savings will look like in 5 years. Very skeptical, given the current hostile climate to natural gas.

    And solar and wind + batteries in the near-term simply aren’t going to be to handle the required night-time baseload. It’s just not going to happen. That’s going to remain the job of nuclear, NG & coal for years to come.

    • Wolf Richter says:

      The math doesn’t work that way.

      Between 100% (at idle) and 70% (at steady cruising speed) of a gallon of gasoline turns into unwanted waste heat. Then, when you step on the brake, the kinetic energy in your vehicle turns into waste heat (heating up rotors, brake pads, and calipers and being dissipated into the air).

      An electric motor and battery produce relatively small amounts of waste heat, and are therefore much more “efficient,” and the regenerative braking system of an EV (electric motors become generators) recaptures much of the kinetic energy and uses it to recharge the battery.

      Batteries don’t hold a lot of energy, compared to 15 gallons of gasoline. But EVs use much less energy than an ICE vehicle because ICE vehicles waste most of the energy they use. So the strain from EVs on power consumption is not big. And you top off your EV every night at home (to replace the small amounts you used during the day), when there is massive idle capacity in the system, and rates are the lowest. This is a benefit for utilities in that they now get some cash flow from this otherwise idle capacity.

  24. Richard Greene says:

    Good article but it leaves the impression that utility stocks would be a bad investment. I don’t believe that’s true:

    Utilities are “regulated monopolies” for which public officials guarantee the companies a monetary return on their investments, while also fixing prices for consumers. The average return was recently about 10% (net profit margin). Those regulators are “forcing” huge investments in solar and wind farms. Additional demand for EV’s just means more even infrastructure will be required.

    Utilities have special accounting rules and pre-established investment returns, where ordinary business incentives often do not matter Utilities do not earn profits on the products they sell — power is provided “at cost” to consumers. Investment in the assets (solar farms, wind farms, substations, transmission lines, etc.) that are used to provide electric power are where profits are made.

    Flat electricity demand sound like bad news for the industry. But the industry will profit from replacing a reliable electric grid, powered mainly by fossil fuels, with a less reliable electric grid, powered mainly by “renewables”. And with the “renewables” in operation, 100% fossil fuel back will be required for nights (solar backup) and low wind periods (wind backup)

    The more infrastructure a utility builds, the higher the profits it can generate. Normally electric utilities would not need much new infrastructure with the flat demand for electricity. But the transition to “renewables” changes that.

    DUE DILIGENCE:
    I have invested in many utilities in the past,
    but current;y own no utility shares

  25. CreditGB says:

    So being “woke” and oh so popular with the Green crowd has weakened revenues eh? What about the heavy subsidies for solar panels and wind mills, are they still the foundation of those technologies?

    Got some other news for ya, the upcoming, and already in progress recession combined with Weimar like inflation, isn’t going to allow the 99% to buy $70k plus EVs, or the attendant charging equipment that will demand the power they will soon be unable to supply.

    Their business is to produce and sell electricity. Did they not realize that shooting their own feet wouldn’t produce pain and blood, or even be fatal to them?

    Who is running these firms anyway?

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