After a decade of mostly modest growth, the US economy kicked into a higher gear in 2018. These new conditions rippled through nearly every aspect of the energy sector including overall demand, power generation, project build, energy prices and CO2 emissions. That’s according to a new report — “Sustainable Energy in America Factbook” — by BloombergNEF and the Business Council for Sustainable Energy.
2018 affirmed many of the key trends documented in previous editions of the factbook. But the year also raised questions about whether US energy can continue on a lower-carbon pathway when economic growth is strong but federal policy support is weak.
According to the report, longstanding trends that continued in 2018 include:
The report notes that the US economy in 2018 grew at its fastest pace in five years, posting an annualized GDP expansion rate of 2.9%. For the first time in several years, energy consumption grew at a faster clip than GDP, rising 3.3% over the same time period. Seasonal factors played an important role, as extreme weather boosted demand for both heating and cooling in the buildings sectors. The US set a record for the most “cooling-degree days” (as defined by the Energy Information Administration) since at least 1990 causing Americans to use more air-conditioning to remain comfortable. The number of "heating degree days" bucked a long-term declining trend to hit their highest level since 2014.
Meanwhile, the increase in overall energy use belied slower growth in transportation consumption (up 0.7%), as Americans continued to buy larger, less fuel efficient cars, but vehicle miles traveled leveled off. Electricity demand as measured in terawatt hours grew at a slower pace of 2.2%. In other words, although overall energy productivity declined in 2018, the US continued to grow more productive and efficient in its use of electricity. Even so, the increase was enough to push electricity sales to a projected all-time high of 3,950 terawatt-hours, a 1.2% increase over the previous record set in 2014.
Globally, 158 corporations have now pledged to source 100% of their electricity needs from renewable energy under the RE100 Initiative. According to the report, in the US, corporate interest in clean energy blew through previous records. Large energy buyers signed contracts for 8.6GW of wind and solar, over twice the previous record of 3.4GW contracted in 2015. Procurement reached into new markets, as companies such as Facebook, Google and Walmart worked together with vertically integrated utilities in New Mexico, Georgia and Tennessee (among others) to build new wind and solar projects. New aggregation models also arose, allowing smaller energy buyers like Etsy and Adobe to combine their demand to sign onto an individual project, thereby leveraging economies of scale previously only open to large consumers.
Corporate activity stretched beyond electricity consumption, with pledges to the EP100 campaign — under which they seek to double energy productivity by 2030 — nearly tripling in 2018. The report states that 37 companies, including H&M, Hilton, and Swiss Re, are members of the initiative, up from only 13 in 2017. Additionally, a new campaign called the EV100 garnered 31 corporate pledges. Companies like IKEA, HP and Unilever promised to ramp up integration of electric vehicles into their corporate fleets and to assist employees in transitioning to cleaner transportation.
Finally, back on the electricity delivery side, 2018 saw some key announcements from US utilities regarding sustainable energy. Minneapolis-based Xcel Energy, which operates utilities in eight states, said it would deliver only carbon-free power to all its customers by 2050. Ohio-based AEP, which serves customers in 11 states, said it will cut its CO2 emissions 80% by 2050 (vs. a 2000 baseline).
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