Monday, May 25, 2009

Electricity Use to Fall for the First Time Since 1945

This is not your ordinary recession. The Financial Times article says [emphasis by me]:

"Global electricity consumption will fall this year for the first time since 1945, according to the International Energy Agency.

"The watchdog for developed energy consuming countries will tell energy ministers from the Group of Eight leading economies on Sunday that electricity demand will fall 3.5 per cent in 2009.

"In China, where power use is seen as a more reliable barometer of economic activity than official economic measures, consumption will be more than 2 per cent lower than 2008. Russia will see a fall of almost 10 per cent, while countries in the Organisation for Economic Co-operation and Development will see a fall of almost 5 per cent.

"Three-quarters of the global decline in consumption is accounted for by industrial rather than household demand, reflecting the fall in demand from China’s manufacturing-heavy economy. Consumption in India, by contrast, is expected to increase 1 per cent."

Still, IEA says that G20 nations are not doing enough stimulus spending on renewable energy.

"The agency will also tell ministers that its calculation of the stimulus spending required from G20 nations on renewable energy was inadequate and should rise by a factor of six if greenhouse gas emissions targets set by the United Nations were to be met."

???? This doesn't make any sense to my short-term thinking. This is probably the most severe recession since the 1930s. Governments run huge deficit, tax revenue down everywhere. IEA comes and tells the governments to spend 6-times more stimulus money on renewable energy. Where does the money come from? Thin air?

It's good to remember who IEA is. It was set up as intergovernmental organization for OECD member countries. It is not an outside, disinterested party advising the governments of developed nations, although news media likes to treat it as such. (My suspicious mind would say if the member governments want to promote renewable energy at all cost, IEA will produce recommendations to that extent.)

Don't confuse IEA with IAEA, International Atomic Energy Agency, which is an autonomous, independent entity under its own international treaty.


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