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rymarcOP•

I've read in the past that GDP growth has a pretty strong correlation with energy output. Since almost all power consumption comes from electricity doesn't this probably indicate a significant slowdown in real economic growth?

7
belbivdevoe•

Historically yes. But in the last decade technology has been particularly aggressive in terms of energy efficiency, maybe what we are seeing here is the payoff? Despite the title, the graphs look pretty flat since 2009. By eye, the biggest negative change in the past few years appears to be in the seasonal peaks of the residential sector.

10
personer3•

But according to Jevon's paradox, improved energy efficiency should result in an increase in aggregate energy consumption. Why are we seeing a decrease, then?

2
manofthewild07•

Does every paradox have to come true? If we have new appliances (for example) that are 50% (or in some cases more) more efficient than the last generation, and an increase in consumption of 10%, the net is still much less energy consumption.

6
personer3•

In the aggregate, yes. Because income saved on cheaper appliances will be used to buy other things that require energy.

1
NotObviousOblivious•

Electricity use in the industrial sector has historically been sensitive to economic conditions as the industry responds to changing demand for goods. The sector experienced a 9.1% year-over-year decrease in electricity use in 2009, during the 2008–09 recession, and electricity sales have declined at an annual rate of 0.9% from their peak in 2007 to 2015. Electricity-intensive industries have grown at about the same pace as the rest of the industrial sector, and efficiency improvements in these industries have contributed to declining electricity sales to industry.

Really strange commentary looking at 07 to 15.

To me the graph looks flat(ish) from 2009 to today.

so I think the answer is yes, but that isn't what is happening here.

3
rymarcOP•

Seeing as how we've been flat(ish) since 2009, another conclusion might be that much of the growth created over the past 5-6 years is not true economic growth. Artifical growth in financial markets (cough . .QE) would appear in equity markets but be totally absent in a metric like this.

So then the question would be, is this type of purely financial growth sustainable or productive?

1
belbivdevoe•

Equity prices are not part of GDP so I doubt it. Insofar as they do affect consumption I would think it would be in the opposite direction due to the wealth effect...

4
NotObviousOblivious•

True. I was reading through the detail to see if anything like private solar output was included, and if any electricity savings programs were accounted for... These points are both absent so it's hard to say if this is a good metric over this particular time period. If the metric is good, you might have a good point.

0
DaphneDK•

There have been progress in energy efficiency, also much of the growth does not occour in the energy demanding heavy industry sector. That doesn't mean it isn't "real growth". Perhaps the many home solar installations are also beginning to be have a mesaurable effect.

3
seruko•

I don't know why not read the first paragraph of what you cited

Declining rates of electricity demand growth reflect a combination of factors, including the market saturation and increasing efficiency of electricity-using equipment, a slowing rate of economic growth, and the changing composition of the economy, which has reduced the role of electricity-intensive manufacturing.

If manufacture and mining are down, but services sectors are up you'd expect to see the above. Which is the short version of the last sever GDP reports.

2
the_ultravixens•

Probably.

1
bricolagefantasy•

If this news were about china, the usual crowd would already scream how china is doom to collapse...

-2
AyeMatey•

Thanks for posting this; very interesting. This is why I love reddit. I would never have seen this except for you sharing it, OP.

3