Keep your lights on and your fridge open if you know what's good for your investments. According to a recent report, electricity demand growth is dropping – fast. Let's take a look at the numbers, and whether this report is fuel on the fire for this overvalued sector.
Going, going, goneIn the 1950s, the U.S. experienced electricity demand growth rates of 10%. That's greater than China's current GDP growth and smacks of yesteryear economic prosperity, when Mr. and Mrs. Smith probably did leave their lights on.
Since 2000, electricity demand growth has averaged a minuscule 0.7% per year, and dropped into the red for the first time since WWII during the Great Recession. The Energy Information Administration's (EIA) projections for the next 40 years don't look any peachier. From now through 2040, annual growth rates are expected to hit just 0.9% a year, just over a third of our currently estimated GDP growth rate. [The Motly Fool]
1 comment:
Reading the entire article leads one to see the focus of the writer is solely one of exploring the risk of investment in utilities.
It should be good news that demand for power is decreasing, in fact conservation should be the principle policy promoted by governmental and research entities around the globe.
This article is hardly informative about the role of, energy, rather it explores how profit can still be made from it.. Case in point-reference to renewables being a good investment because of numerous RPS, subsidies, and tax incentives. No mention of the complete failure of renewables to impact global warming or the global energy crisis.
Real, truly effective solutions to the energy issue will allude us as long as investor profit is the driving factor.
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