By Manuel Gutierrez, Consulting Economist to NKBA
Key Takeaways:
- Renewable production is up by 83% since 2000, vs. a 39% increase for fossil fuels.
- Renewable share has crept up to 13%, compared to 10% in 2000.
- The industrial sector accounts for 33% of all energy usage, while residential is at 22%.
- Electricity costs for residential are significantly higher than the average for the other three sectors.
The American energy landscape is changing, but not as rapidly as some wish it would.
From a production vantage point, the volume of energy generated by renewable products such as wind or solar has increased by 83% since 2000.
Over the same period, total production of fossil fuels grew by 39%. In other words, production of renewables has risen more than twice as fast as fossil fuels (Figure 1.)
Despite the rapid growth of renewables, their share of the total energy picture remains fairly low at 13%, up three percentage points in 20 years.
Fossil fuels’ share has not changed over this period, though. This is because nuclear electric power production, which is not shown in Figure 1 since it’s not classified as a fossil or a renewable source, has slipped by 2% since 2000. The nuclear share of total production is currently 7.5%.
Within renewables, wind and solar energy production have increased the most. Virtually non-existent in 2000, their combined share stands at 5.8% of total production.
Figure 1 also shows that coal production has fallen since 2000, while at the same time, production of the other three fossil fuels have increased. Crude oil production is up 87% and both forms of natural gas are up significantly; natural gas (dry) production today is 82% higher, while natural gas (liquid) is 172% higher.
From a consumption standpoint, the usage of renewables is similar to production, since foreign trade plays a very small role. The left panel of Figure 2 depicts consumption of renewables as almost a mirror image of Figure 1.
U.S. energy consumption today is 7.46 quadrillion BTUs, down 3% from 2000. There has been a 10% drop in consumption of fossil fuels, while usage of renewables is up 83%.
Since 2000, production of renewal energy has increased by more than double that of fossil fuels.
Within fossils, most of the decline is in consumption of coal, down 60% from 2000, although consumption of petroleum products is off by 5%.
Among renewables, hydroelectric power consumption is 41% lower than in 2000.
The major user of energy in the U.S. is the industrial sector, which consumes one-third of total energy (Figure 3). This sector includes manufacturing, agriculture, mining and construction industries.
The second largest user is the transportation sector, capturing over one-quarter of total energy used. This sector comprises various transport vehicles, including autos, trucks, motorcycles, boats and airplanes.
The residential segment, including single-family houses and apartments or condominiums, consumes over one-fifth (22%) of U.S. energy.
The commercial segment includes shopping malls, offices, banks and other commercial buildings, restaurants, hotels, churches and more. Together, these account for 18% of energy usage.
Figure 4 illustrates the trend in electricity prices paid by each of these four segments since 2000.
Residential users pay the highest prices for electricity among the four segments.
The cost of residential electricity in April was 13.76 cents per kilowatt hour (kWh). This is 28% higher than the average price for all four segments combined (the magenta “Total” line in Figure 4), which is 10.73 cents. One reason for the higher cost to residential consumers is the more complex and higher distribution costs to residential homes.
The industrial sector enjoys the lowest prices for electricity. The latest average price is 6.77 cents per kWh, 37% below the total price.
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