in News Departments > New & Noteworthy
print the content item

Electricity efficiency gains, demand side management (DSM) programs and distributed generation (DG) have reduced customer consumption and cannibalized traditional utility-supplied power, according to a Fitch Ratings report.

As a consequence, Fitch says it believes that utilities will have to include efficiency, DSM and DG as part of their product portfolio going forward.

The firm reports that the Energy Information Administration recently revised its forecast for retail U.S. electricity sales growth to 0.7% per year through 2040. Fitch expects substantial regional variance from the national forecast, with growth in the Southeast and Southwest.

Energy efficiency, whether mandated or promoted by favorable cost economics, continues to play a significant factor in dampening retail sales, as does net metering and DG, Fitch adds. In addition, Fitch notes that the economic recovery and expansion since 2009 has done little for electricity sales growth.

According to the report, low electricity sales growth will pressure unit costs and challenge the economics and benefits of future capital investments and rate design. As such, capital investments and rate design will need to be restructured as costs are allocated over a changing customer profile, Fitch says.

The firm states that the economics of energy efficiency are compelling, as the benchmark levelized cost of electricity used to compare the cost of energy efficiency programs is substantially less than all forms of conventional or renewable power generation. Fitch adds that efficiency is an effective tool in displacing new power generation, produces peak load shaving and avoids or at least reduces the highest-cost sources of electricity generation.


Hybrid Energy Innovations 2015
Latest Top Stories

SPP Raises Concerns About EPA's Proposed Clean Power Plan

Stakeholders around the U.S. are mulling over the Environmental Protection Agency's blueprint to cut emissions from existing power plants. The Southwest Power Pool has released its assessment of the plan.


Comverge, Constellation To Merge Demand Response Businesses

The two companies have announced a deal to combine their DR operations serving commercial and industrial customers and establish a new, standalone entity.


Grid-Scale Energy Storage Continues Making Inroads

A new report from Navigant Research highlights the biggest markets and most popular technologies for grid-scale energy storage.


Demand Response And Renewables Help SDG&E Tackle Record-Breaking Heat Wave

San Diego Gas & Electric (SDG&E) recorded peak demand records last week and relied heavily on energy conservation, as well as imported wind and solar power, to keep the lights on.


Report: Utility-Scale Renewables Keep Getting Cheaper

A new study suggests the levelized costs of energy of utility-scale wind and solar power are catching up with those of traditional sources, even without subsidies.

S&C Electric_id176
Hybrid Energy Innovations 2015
edf_id180