Energy Industry Says More Construction Needed

Energy Industry Says More Construction Needed

Apr 21 - USA TODAY

Environmentalists argue more energy efficiency could greatly reduce the need for a huge new wave of power plants and transmission lines.

In two studies out today, the power industry gives its terse response: Don't count on it.

Increased efficiency can offset a substantial but relatively small portion of the increase in generating capacity needed to meet rising electricity demand, the studies say.

Even with widespread purchases of energy-saving appliances and better-insulated homes, the USA will still need to build at least 151 gigawatts of new generation -- enough to power 75 million homes -- by 2030, says one study by The Brattle Group for Edison Electric Institute (EEI), the industry's trade group.

The projects, aimed at meeting new demand and replacing aging plants, would cost $457 billion. The biggest wave of utility construction in a generation would also require $900 billion for lines to transport the power.

"No matter how you slice it, we need to build a lot of new generation and transmission," says EEI executive director Diane Munns.

Some say the studies' energy-saving forecast is conservative. "They're low-balling the opportunity several-fold," says Steve Nadel, head of the American Council for an Energy Efficient Economy.

Power demand is expected to surge 30% by 2030 as the U.S. population grows and more consumers buy energy-thirsty flat-screen TVs and other electronics, the Energy Information Administration says. That projection accounts for current utility programs that give consumers rebates for purchases of efficient appliances. It also figures in a recently passed federal law that toughens appliance standards and phases out the incandescent light bulb by 2020.

Additional utility efficiency efforts could cut power demand in 2030 by 7% to 11% compared with what would be achieved by current measures, says a second study by Brattle and the Electric Power Research Institute, which is partly funded by utilities.

Under that estimate, new generation could be sliced by up to a third to 151 gigawatts, though a more realistic 17% drop would still require building 188 gigawatts of capacity, enough to light 94 million homes, the EEI report says.

Brattle's Ahmad Faruqui concedes the study doesn't account for expected U.S. legislation to cut utilities' global-warming emissions or reduced power usage that would result from soaring rates. Those forces could double the electricity savings, he says. Even then, significant new generation would still be needed.

Nadel, by contrast, says the decrease in power demand could be much higher. He cites plans by Maryland for ambitious efficiency programs designed to freeze demand at today's levels by 2030, virtually eliminating the need to build new plants. Other states could follow suit, he says.

Yet Munn says utilities can't count on bold initiatives that may not develop. "We could find ourselves without" adequate supply, she says.