Energy intensity to continue to fall through 2050

U.S. energy consumption is expected to rise slower than GDP through 2050 as energy intensity continues to fall, according to the U.S. Energy Information Administration (EIA). The projection was part of the EIA’s Annual Energy Outlook 2020.

Energy intensity is a measure of how efficiently the economy uses energy to produce every dollar of GDP. Between 2019 and 2050, total U.S. energy consumption will rise at an average annual rate of 0.3%, while GDP will increase at an annual rate of 1.9%, according to EIA’s baseline, or reference case, projections. Over the same period, energy intensity is projected to fall at an average annual rate of 1.5%. By 2050, the domestic energy consumption associated with each dollar of U.S. economic growth is expected to be less than half of what it was in 2005.

Energy consumption growth in the United States is tied to a rise in GDP and other economic expectations and is partially offset by improved energy efficiency and other changes in the economy as a result of lower energy use per unit of economic output.

Along with the baseline, or reference case, projections, the EIA also makes other projections based on faster or slower rates of GDP growth. In the other projections, the trends differ very little. In the high economic growth case, economic growth and energy consumption are higher than the reference case. However, energy intensity is expected to fall at 1.6% annually. And in the low economic growth case, energy intensity falls at 1.4% annually.

The U.S. industrial sector uses more energy than any other sector, and its energy use is projected to rise faster than any other sector at an average annual rate of 0.8% through 2050, according to the EIA. Energy intensity in the U.S. industrial sector, which is measured as energy consumption per dollar of output, falls by 0.4% annually on average through 2050. The decline can be attributed to a rise in manufacturing industries that are less energy-intensive. The growth of those industries is expected to increase at a quicker rate than the more energy-intensive manufacturing industries.

Energy use in the U.S. transportation sector is expected to fall by an average of 0.2% annually, from 2019 to 2050. Existing fuel efficiency regulations don’t require additional improvements for new light-duty vehicles after 2025 and for new heavy-duty vehicles after 2027. Meanwhile, vehicle travel demand is projected to exceed fuel economy improvements, and energy consumption for the on-road transportation sector is expected to increase starting in 2041. The energy intensity with regard to other transportation modes, such as rail, bus and air travel, are also expected to fall as energy-efficient technologies and practices are implemented.

The growth in U.S. residential energy consumption is expected to be flat between 2019 and 2050, while commercial energy consumption is expected to rise 0.3% annually. Existing efficiency standards and incentives are expected to lead to energy efficiency improvements. These improvements and a rise in distributed electricity generation, including on-site solar, are expected to partially offset the effects of growth in the U.S. population, households and commercial floorspace.