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26 August 2016

4 facts about utility transformation: #2 – We have economic growth, even as the use of electricity is declining!

Continuing on the same note as in the first post in this series, “#1 – the days of solid growth and margins are over”, today we’ll present some more numbers on electricity consumption and the utility industry that raise eyebrows. For example, many still see increased electricity consumption as a precondition for economic growth.

This was true also in my mind. It seemed logical that if we produce more and earn more, we’ll consume more energy (not only electricity). Scientists documented, over and again, that a higher electricity consumption per capita has a strong correlation, not only to social development indices, such as infant mortality rate and maternal mortality, but also to economic indices, such as GDP.

The correlation was, not surprisingly, argued by scientists to be stronger in developing countries, even if there was a proven correlation also in Europe. Then things started to change: energy efficiency became a must in industries and households alike, consumer awareness rose, so did technical evolution and the share of renewable energy generation. These changes were driven partly by political agendas and societal factors, as well as the climate debate.

So, is it working? Are modern regulatory schemes and political agendas having a noticeable positive effect on the correlation between the growth of GDP and energy consumption? Well, I guess so because:

Fact #2 – We have economic growth, even as the use of electricity is declining!

Find out more in the original article on The Networked Society Blog