x Abu Dhabi, UAEFriday 21 July 2017

Recovery strains electricity grid

Electricity demand is rising once again as the world recovers from the worst economic slowdown in decades.

Electricity demand is rising once again as the world recovers from the worst economic slowdown in decades. A return to levels of demand unseen since early 2008 spells problems for many countries that failed to make adequate preparations for the predictable follow-up to the sharpest decline in energy consumption on record.

Large swathes of the developing world and, more surprisingly, several advanced economies are suffering. "The recession and now, hopefully, the recovery, has taught us how interlinked the world really is," Tony Hayward, the chief executive of BP, said last month, introducing the latest edition of the company's benchmark Statistical Review of World Energy. In the developed world, many problems stem from ageing metropolitan power grids that for decades have been jerry-built to handle rising electricity demand. A recent power cut affecting several major cities in the eastern US and central Canada is the latest example.

Others power problems in advanced economies relate to uncertainties over how mandated reductions in carbon emissions will be handled. The ISO-RTO Council, a group of US and Canadian power-grid operators that manage most of North America's bulk electric grid, is working on a plan to deal with the one million plug-in vehicles that could be deployed on the continent within 10 years. Grid operators will need to work with new types of organisations such as car makers and retailers "with little or no experience in interfacing with the bulk power grid", the group predicted, requiring investment in "increased communications capacity". It also called for more research on the behaviour of consumers faced with higher power prices as their plug-in cars raise electricity demand.

This is an example of the emerging complexities facing electricity providers in countries with changing patterns of energy consumption. The question of how developing nations will cope with simple increases in power demand is older but still has no easy answers. This is dramatically demonstrated in some of the wealthiest developing economies. The reasons for a rich country to run short of power are always complex. In the case of most Gulf states, they include insufficient planning for infrastructure to support industrial development, poor communication between state-owned utilities and their customers, and generous energy subsidies. The last two have contributed to poor energy conservation.

In addition, political rivalries have impaired co-operation and led to the patchwork development of electricity infrastructure with limited power-sharing capacity. With the financial resources of advanced economies strained while economic growth rebounds in the developing world, global power problems are likely to intensify. Unfortunately, our world electricity survey suggests this is already happening.