Why Electricity Demand Is About to Get a Jolt
We highlight three utilities that should benefit from our forecast of 1.25% annual electricity demand growth through 2030.
Andrew Bischof: U.S. electricity demand has flatlined during the last decade, but we think it is set to spring to life. Energy efficiency will remain a drag on electricity demand, but those gains face diminishing returns. We think three emerging electricity demand sources--electric vehicle charging, data centers, and cannabis cultivation--will approach 6% of total U.S. electricity demand by 2030, offsetting energy efficiency and supporting our 1.25% annual electricity demand growth forecast through this time period.
Utilities will have to work hard to benefit from these new demand sources. The most successful utilities must attract these industries by investing in grid expansion, smart networks, safety, reliability, and renewable energy during the next decade. Utilities that slack on investment now could face slowing earnings and worse, dividend growth. Worst case, utilities that miss out on this new demand might face the so-called death spiral, leaving investors with disappointing future returns. We highlight three utilities that should benefit from our forecast.
Andrew Bischof does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.
Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.
We’d like to share more about how we work and what drives our day-to-day business.
We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.
How we use your information depends on the product and service that you use and your relationship with us. We may use it to:
To learn more about how we handle and protect your data, visit our privacy center.
Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.
To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.
Read our editorial policy to learn more about our process.