It’s hard to believe that just a few years ago economic growth was tied to electricity sales. The two were thick as thieves, best-friends-forever, hand-holding and everything. Then, in 2008 things changed. The country entered an economic depression, and retail electricity sales continued to drop by small percentages. The result is what’s called demand destruction, and it could spell disaster for energy providers.
The Difference Between Demand Destruction and Demand Reduction
The aftermath is what Slate.com refers to as the “New Energy Economy.” The struggling economy resulted in more people regulating their energy usage, as well as seeking out ways to generate their own electricity. Businesses continue to seek out ways to generate their own electricity as well, including rooftop gardens and solar panels. This is demand destruction.
Demand destruction is when the need for a resource is eliminated completely or significantly reduced. This is not the same thing as demand reduction, which occurs when consumers switch to CFL lightbulbs or Energy Star rated appliances. Demand destruction happens when a consumer or business trades in their gas-guzzlers for electric cars, or when a business purchases wind turbines. It occurs only when the need for the resource is significantly reduced or eliminated.
For consumers, the New Energy Economy is both good and bad. It’s good because it’s resulted in lower priced solar panels and more competitive energy markets. Many communities have deregulated their energy markets, such as Alberta, Canada. The deregulated market results in more options for the consumer, such as lower price energy and more alternative energy suppliers to subscribe to. For more information, check out Alberta Energy Providers: visit site.
The New Energy Economy is bad for consumers because it could result in significant job loss. If energy suppliers go out of business, the economy may suffer. One can only hope that alternative energy suppliers are able to create and provide new jobs, so thousands of employees aren’t left with financial hardships to face.
How Businesses Can Contribute to Efficiency
Although a struggling economy had a lot to do with reducing energy consumption, climate change played a role too. Climate change has the potential to affect how much energy the world is able to produce. According to the EPA, water is needed to produce energy. Water is needed to produce energy, but climate change could lessen the amount of water available.
Businesses will need change some key habits, in order to save water now – in preparation for a future where water reserves may run low. Here’s some easy ways your business can begin conserving now, and thus contribute to a more energy-efficient world (and, thus, contribute to demand reduction):
- Use cloud technology to distribute important information and data; as opposed to large volume print jobs
- Reduce unproductive travel time by staying connected online and conducting virtual meetings and teleconferences
- Encourage employees to turn off lights, computers, and other electronics at the end of the day
- Educate employees on the benefits of reducing their carbon footprints
- Subscribe to a smart service, such as a service that automates your businesses’ lighting systems and more
In the last 10 years, energy costs have risen substantially despite an economic downturn that began in 2008 and didn’t recover for some years. The result is demand destruction, which is disastrous for nonrenewable energy providers, but spells ultimate success for those offering renewable energy sources. Regardless of how you view it, good or bad, it’s happening. Businesses are encouraged to explore the New Energy Economy, and determine exactly how it can best benefit the overall profitability of your company.