Residential electricity use will decline “significantly” over the next five years, even as electric vehicles are expected to show tenfold growth, according to PSEG Long Island projections.
Wider adoption of energy-saving LED lights and green-energy alternatives, along with slower-than-expected economic growth, are leading the home-use declines, said Paul Napoli, PSEG’s vice president for power markets.
Adoption of efficiency and solar have been “phenomenal on the island,” Napoli said, sharply cutting demand, while economic forecasts call for slower growth than previous projections over the next decade.
“We expected in 2012 the [Island’s economic] growth would be [a cumulative] 48.7 percent by 2030, it is aiming to be 28.9 percent,” he said.
PSEG, which operates the grid under a long-term contract with LIPA, said the downward trend also mirrors an expected “weakness” in household income through 2020. The utility projects home energy sales to drop 2 percent annually to a cumulative 9.8 percent decline by 2023. Commercial sales will decline at a slower pace of 1.3 percent during that time, according to PSEG.
Residential sales of electricity have fallen 4.6 percent in five years, PSEG said. The change comes even as PSEG expects electricity sales tied to electric vehicles to increase tenfold from 36 gigawatt hours last year to 382 gigawatt hours in 2023.
Meanwhile, the utility’s peak load — energy produced to meet peak summer demand — also continues to drop. The peak is now projected to decline or level off for 15 years. Previously, LIPA saw significant growth over the 15-year curve.
“Every time we update the study of our peak load, we see that the load is declining year after year after year,” said LIPA’s acting chief financial officer, Kenneth Kane, in a presentation to LIPA board members last month.
Napoli said the dramatic decrease in peak-power needs has all but erased a prior projection that a big new power plant would be needed sometime around 2035. Right now, the utility is unofficially projecting a peak power need in 2030 of about 4,800 megawatts — a sharp decline from last year’s actual summer peak of 5,380 megawatts. A megawatt powers 800 to 1,000 homes.
With increasing state mandates for renewables such as offshore wind power, PSEG foresees a greater need for battery storage units on Long Island to go along with two now operating on the South Fork, and a corresponding reduction in the number of traditional plants.
“There will absolutely be retirements” of older plants, Napoli said, “but which ones and when we can’t say.”
Regulatory standards require that system planning be built around the peak demand. That’s one reason fortification of the South Fork grid continues apace, with storage batteries, offshore wind and a $513 million grid enhancement already underway, Napoli said. The South Fork experiences a peak increase of about 2 percent a year, and that’s expected to continue through 2020, when it will drop to 1 to 1.5 percent thereafter, Napoli said.
For the larger system, continuing declines in the summer peaks are a big change from LIPA’s prior outlook. In 2013, LIPA expected the peak power needs by 2032 would be upward of 7,400 megawatts, requiring at least one large new power plant and the overhaul of four older plants. Since then one old plant has been shuttered, two won’t ever be overhauled, a third, in Northport, is the subject of an 18-month study to examine its feasibility. Also, plans for a new plant have been canceled.
But even as plants get retired as use drops, it's too soon to say how those trends will impact rates, PSEG said.
“Our job on the technical side is to make this [power-source mix] work together, and do it in such a way that the bill impact is not a dramatic change,” Napoli said. “It’s impossible to tell a dollar amount. It’s changing so fast that it’s hard to predict.”