Electricity Supply, Demand Rise During 2002

Industrial construction may have been in the doldrums in 2002, but power-plant construction was still going strong. Approximately 54,000 megawatts of new generation was brought online last year—boosting new supplies by 7%— according to Energy Argus, a news and research group focusing on energy issues.

The firm’s industry watchers expect 2003 to continue this positive trend, though probably not at last year’s level.

The long lead time required to develop power-plant projects is the reason construction in this sector has remained strong through the current economic downturn, Energy Argus reports. Most of the plants now coming into service were planned initially in 1996 through 1998, when electric-utility deregulation was driving the entry of independent power producers into the market.

Last year saw significant growth in electricity demand as well, rising 4.1% over 2001 levels, according to the Edison Electric Institute, the association of publicly traded utilities. Weather played a large role in these higher consumption rates. A new all-time weekly usage peak was reached the week ending August 3, during which 90,640 gigawatt-hours were delivered across the United States.

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