California’s Economic Growth Outpaces Energy Consumption

California has demonstrated that it is possible to grow the economy with only a small increase in the state’s energy consumption.

From 2015 to 2016, electricity consumption in California grew less than 1 percent for a total of 285,701 gigawatt-hours, according to a recent California Energy Commission tracking progress report on energy demand.

With this slight increase in electricity consumption, job growth increased nearly 2 percent, and California’s gross state product grew almost 3 percent, according to the report.

The data comes from the Energy Commission’s 10-year forecasts for electricity demand in California which shows that economic growth outpacing energy consumption is part of a longer trend. The forecasts are part of the Integrated Energy Policy Report process.

Between 2000 and 2016, job growth increased nearly 13 percent while electricity consumption grew almost 9 percent.

The growth in the economy outpacing energy consumption occurred as population in the state increased. The state’s population grew by 15 percent from roughly 34 million in 2000 to 39 million in 2016, according to the report.

The data also includes three forecasts: a high energy demand forecast, a low energy demand forecast, and one forecasting mid-energy demand, as show below in Figure 1.



The high energy demand forecast incorporates relatively high economic and demographic growth, relatively low electricity and natural gas rates, and relatively low efficiency program and self-generation impacts.

The low energy demand scenario assumes lower economic and demographic growth, higher rates, and higher efficiency program and self-generation impacts. The mid energy uses assumptions at levels between the high and low cases.

The scenarios come from the Energy Commission’s California Energy Demand Updated Forecast, 2017-2027. That report incorporates recent economic and demographic projections and adjusts for the latest historical data available for consumption, peak demand, temperatures, and electricity rates.

The forecasts are used in various proceedings, including the California Public Utility Commission’s long-term procurement planning process and the California Independent System Operator’s transmission planning process.