THE RELEVANCE OF ENERGY EFFICIENCY FOR ELECTRICITY SUPPLY

The international electricity supply industry (ESI) uses one-third of global primary energy demand in power stations. Thus, its history records numerous technological changes aimed to raise thermal efficiency of power generation and reduce transmission and distribution losses. These were motivated by pressure to lower electricity costs in final energy markets; and by competition amongst the ESI's equipment suppliers, especially the heavy electrical industry. The introduction of even greater competition into the global ESI via deregulation, privatization and new plant procurement practices (and the growing salience of environmental factors) will further proper the search for energy efficiency gains in electricity supply. Historically, the ESI has been less interested in energy efficiency on the consumer side of the electricity meter. In applications such as lighting and electronics, electricity faces no effective competition. In these captive markets, innovation to enhance efficiency has derived mainly from electrical appliance and equipment suppliers. In the competitive industrial process and residential heating markets, the ESI is more proactive. However there remains uncertainty as to whether wider or wiser electricity use should motivate ESI corporate and marketing strategies, especially when these goals conflict. The ESI will face stronger pressures to stimulate energy efficiency measures by its consumers. How will it respond to this challenge?