Energy Intensity Indicators: Electricity Delivered Energy

A kilowatt-hour (kWh) of electric energy delivered to the final user has an energy equivalent to 3,412 British Thermal Units (Btu). Figure E1, below, tracks how much energy was used by the electricity generation sector to produce a kWh of electricity (i.e., heat rate). Until 1988, the data apply to the electric power sector only (i.e., utility sector generators within the electric power sector that are either owned by utilities or by Federal, state, and local governments). With the passage of the Public Utility Regulatory Policy Act (PURPA) in 1978, the electricity industry began a process of restructuring that is still on-going.

Over the past two decades, independent power producers have been permitted to produce electricity and sell it to the distribution network. A major revision of the electricity data in 2002 by the Energy Information Administration now provides information about generators by four different classes: utility sector generators within the electric power sector that produce only electricity and three ownership classes of Combined Heat and Power (CHP) plants - those owned by utilities, those operating as part of the commercial sector and those operating as part of the industrial sector. The heat rate for these four classes of generators is shown in Figure E1, beginning in 1949 for electric-only plants and beginning in 1989 for the three types of CHP plants.

In 1949 central power plants required an average of 14,900 Btu to deliver a kWh of electricity to the final user. By 1965, this average heat rate had dropped to 10,440 Btu per kWh. Thirty-nine years later the heat rate for these same generators is only slightly less - 10,210 Btu/kWh. The performance for commercial and industrial CHP plants, according to this data, are not much better, although they fluctuate and heat rates that are below 10,000 Btu/kWh have been achieved in some years. The most efficient generators, according to these figures, are the CHP plants operated by utilities. In 2004, these plants, used about 9,500 Btu to generate a kWh of electricity which was about a 7% improvement over the electric-only plants.

In the last two years, these numbers changed in ways that seem unreasonable. Between 2000 and 2004, industrial CHP heat rates have increased from 9,830 to 13,240, an increase of almost 35%. Commercial CHP heat rates climbed from 9,890 in 2002 to 12,820 in 2004, an increase of nearly 30% in two years. These changes are the result of a change in the survey form used to collect this data.

A chart shows four lines representing the electric power sector/electricity only plants, CHP plants operated by utilities, commercial CHP plants, and industrial CHP plants for the years 1949 to 2004.  Btu/kWh is plotted on the vertical axis; years are plotted on the horizontal axis.  The top line, the electric power sector, drops from nearly 15,000 in 1949 to around 10,400 in the mid-1960s where it levels off, dropping only slightly in the 2000s to around 10,200.  The next three lines only begin in 1989.  The commercial CHP plants line is a jagged line moving slightly above and below the top line until 2003, when it climbs from 10,000 to nearly 12,000, then climbs even higher in 2004 to 12,800.  The industrial CHP plants line is an undulating line slightly below the top line except when it intersects the top line in 1995, jumps to around 11,000 in 2002, falls to about 10,200, then climbs to 13,200 in 2004.  The bottom line, representing CHP plants operated by utilities, is around 9,000, rising to slightly above this level beginning in 1990 for 5 years, then dropping slightly below this level for the next 9 years, and then rising to 9,500 in 2004.

Figure E1 . Heat Rates for Electric-Only and Three Classes of CHP Plants, 1949-2004

Results based on delivered energy consumption are presented for the period 1985 to 2004.

  • Activity: Kilowatt hours produced by the electric power sector, the measure of activity used here, has increased by nearly 54% since 1985.
  • Energy Use: The energy used to produce electricity has increased by 49% over the same period. These figures are shown in Figure E2.
  • Energy Intensity Index: Figure E2 shows how intensity has changed for all electricity produced since 1985, measured as kilowatt hours per Btu. Figure E3 shows how two different sets of explanatory factors have contributed to the reduction of energy use by this sector. Since 1990, the energy intensity of the electric power sector has declined by about 2.5%, with most of the reduction occurring since 2000.
  • Changes due to factors unrelated to efficiency improvements: In addition, two structural effects have contributed to the reduction in energy use per kWh of electricity delivered. The first of these, labeled "CHP shift" on Figure E3, show the contribution that using combined heat and power has had on the industry - a modest contribution of about half a percent since 1990. These numbers are shown using a base year of 1990, rather then 1985. "Technology improvements and fuel-mix shifts" are embodied in the second structural measure shown in Figure E2. The improvements in combined-cycle plants (plants that typically burn natural gas in a combustion turbine, then raise steam with the exit gases and use that steam to run a steam turbine) have contributed to some reduction of energy needed to deliver electricity to customers, but this has probably been slightly offset by increased use of other gases (blast furnace gas, propane, and other gases) that are considerably less efficient in the production of electricity.
A chart shows three lines representing energy consumption, electricity generation, and Btu/kWh aggregate intensity for the years 1985 to 2004.  An index with 1985 equal to 1.0 is plotted on the vertical axis; years are plotted on the horizontal axis. After barely moving the first year, the top line, electricity generation, rises to about 1.8 in 1990, remains fairly level through 1992, then climbs to 1.47 in 2000, dips slightly in 2001, then continues to climb to 1.54 in 2004.  The second line, energy consumption, nearly covers the top line until 1994, is just under the top line until 2000, when it diverges more, rising slower, ending in 2004 at 1.49.  The third line, Btu/kWh aggregate intensity, is close to the 1.0 line, dropping just below it in the early 1990s then moving lower at a slightly steeper decline in the early 2000s, ending at 0.97 in 2004.

Figure E2. Electric Power Sector: Energy Use and Aggregate Intensity, 1985-2004

A chart shows three lines representing intensity index, CHP shift, and technology & fuel-mix shifts for the years 1985 to 2004.  An index with 1990 equal to 1.0 is plotted on the vertical axis; years are plotted on the horizontal axis.  The intensity index line begins at 1.006 in 1985, rises to 1.007 the next year, drops to slightly under 1.0 in 1988, rises to 1.0 in 1990, drops to 0.993 in 1992, slowly rises to just under 1.0 in 1996, drops slowly again to 0.993 in 2000, then begins a steep drop to 0.975 in 2003, where is remains in 2004.  The technology and fuel-mix shifts line begins at 0.996 in 1985, where it remains until it begins to rise slowly in 1989, to about 1.001 from 1991 through 1993, then it slightly declines, rises twice, and dips to 0.997 in 2004.  The CHP shift line only starts in 1989, at slightly above 1.0, and slowly declines in a fairly straight line, ending at 0.996.

Figure E3. Sector Energy Intensity Index and Two Structural Components, 1985-2004