Lower CA Energy Demand Expected

California energy demand and annual growth rates are estimated to be below 2014 forecasts, according to the California Energy Commission’s draft 2015 Integrated Energy Policy Report released this week.

Higher projections for self-generation—particularly photovoltaic systems—are predicted in the nearly 300-page report to reduce growth in peak demand and retail sales. Consumption through self-generation of electricity is projected to reduce retail sales by more than 35,000 GWh by 2025, an increase of around 12,000 GWh compared to the 2014 update’s projection.

Annual growth in consumption averages 1.2 percent from 2016−2026 in the 2015 draft IEPR, as opposed to the 1.23 percent projected in the 2014 IEPR Update.

Additionally, last year’s IEPR Update projected that 2015 would see 284,305 GWh of consumption, but that has been revised downward to 283,098 MWh. Likewise, the projections for 2020 and 2025 have been downgraded from 301,290 and 320,862 GWh to 298,838 and 319,623 GWh, respectively.

Annual growth rates for peak demand are forecast to rise 0.89 percent from 2014 to 2025, compared to the 1.13 percent growth projected in the 2014 IEPR Update. Regarding energy sales, annual growth averages 0.68 percent in the 2015 report, versus 1.06 percent in the 2014 Update.

Similar to electricity, the Energy Commission develops a forecast of natural gas prices, production, and demand. In the commission’s 2015 Natural Gas Outlook, the preliminary forecast for end-use demand shows about an 11 percent higher growth rate than the 2013 IEPR forecast, with staff attributing the higher growth rates to an increase in natural gas demand for transportation—specifically by heavy-duty trucks— as well as an increase in residential demand.

Demand for natural gas used in electricity generation, however, is expected to decline over the forecast period, which the report says is driven by increases in the share of electricity generated from renewable resources that reduce the need for power from fossil-fueled sources.

The draft report also covers what the Commission calls “ongoing vigilance” to maintain reliability in Southern California.

In 2012 an interagency report, “Preliminary Reliability Plan for LA Basin and San Diego,” was released that called for a rough replacement target of 50 percent preferred resources and 50 percent conventional generation.

The Energy Commission has been hosting workshops with commissioners and executives of key agencies since 2013 to discuss Southern California reliability issues, with the most recent being Aug. 17 at the University of California, Irvine.

The draft IEPR also delves into renewables, with the report stating that strategic transmission investments are needed to link renewable resources to load centers throughout the grid.

Geographic diversity in the renewables portfolio can help achieve the 50 percent renewable goal by 2030, the report states. However, transmission planning needs to be streamlined and coordinated to ensure that transmission projects take proper account of renewable energy potential, land-use, and environmental factors.

The Energy Commission staff has also developed a preliminary transportation energy demand forecast through 2026. It foresees that gasoline and diesel likely will continue to be the primary sources of transportation fuel through 2026.

“Long-term transformation of the transportation system is achievable but will require efforts on many fronts with a diverse range of actors and partnerships,” the draft states. — Mark Edward Nero