January 10, 2006
Report: Indiana may need new electricity resources by 2010
WEST LAFAYETTE, Ind. — A new report indicates Indiana may be faced with an 11 percent increase in electricity demand in the next five years, but prices should remain steady over the next two decades.
|
"The state currently has sufficient electricity resources, but the near future will likely bring steady growth in demand," said Douglas Gotham, director of the State Utility Forecasting Group, a state-funded panel of researchers based at Purdue University.
The 84-page report, entitled "Indiana Electricity Projections: The 2005 Forecast," contains projections of the state's energy needs over the next 20 years and was prepared for the Indiana Utility Regulatory Commission (IURC). Analysts will present the report's findings to the state utility commission on January 11.
The forecast was prepared by Gotham; Ronald Rardin, a professor of industrial engineering at Purdue, and analysts Forrest Holland, Zuwei Yu and David Nderitu.
Among the report's findings is the prediction that by 2010 the state will need to provide an additional 2,970 megawatts of electricity resources, which represents a 14 percent increase over the present level. The panel used a system of sophisticated mathematical models to predict future trends for residential, commercial and industrial power users in the state.
The increased demand by 2010 could be met by building new plants, purchasing electricity from other generators on the power grid or increasing efforts to conserve electricity, Gotham said.
Electricity consumption for commercial users is expected to outpace residential customers over the next 20 years, rising at a projected rate of 2.61 percent annually. Residential electricity use is projected to rise at a rate of 2.22 percent per year over the same period, fueled largely by urban sprawl in the Indianapolis area, with city dwellers moving to surrounding communities. Industrial electricity consumption is forecast to grow at a more moderate rate of 1.99 percent annually.
The analysts used energy models to study eight power providers representing more than 99 percent of the electricity supplied to Indiana. The report looked at three categories of electricity provided to users: baseload power, which is produced by plants that generate electricity throughout the day; peaking power, which is produced by plants providing electricity only during times of the heaviest demand, such as the hottest periods on summer days; and cycling power, which is produced by plants providing power for uses that are between peaking and baseload demand.
Of the projected 2,970-megawatt increase in 2010, 940 megawatts is for baseload power, 860 megawatts is for peaking power, and 1,170 megawatts is for cycling power.
The report includes various other findings, including a projection that the so-called "real price" of electricity, or the price adjusted for inflation, is expected to remain steady over the next 20 years.
"But this projection does not include the possible economic impacts of pollution control measures that could be necessitated by more stringent federal environmental guidelines," Gotham said.
Clean air standards from the U.S. Environmental Protection Agency could require Indiana utilities to double the amount of equipment for reducing sulfur dioxide and nitrogen oxide emissions from coal-burning power plants over the next 15 years. The forecasting group is preparing a separate study focusing on cost projections related to more stringent environmental standards.
The Purdue-based group prepares the reports about every two years to predict Indiana's future electricity requirements and the need for new generating capacity. The previous report was released in 2003.
An online copy of the new report will be available Wednesday at 2:30 p.m. at the State Utility Forecasting Group web site.
The forecasting group does not make recommendations. The studies are done in accordance with a state law enacted in 1985 to provide the state regulatory commission with an impartial projection of electricity consumption and peak demand. That information is used in determining whether the need exists for additional power plants. This is the 10th full report compiled by the group.
The forecasting group is associated with Purdue's Energy Center, which is part of Discovery Park, the university's hub for interdisciplinary research and enterprise.
Writer: Emil Venere, (765) 494-4709, venere@purdue.edu
Sources: Douglas Gotham, (765) 494-0851; gotham@purdue.edu
Mary Beth Fisher, public information director of the IURC, (317) 232-2297; mfisher@urc.state.in.us
Purdue News Service: (765) 494-2096; purduenews@purdue.edu
Note to Journalists: A copy of the report will be available Wednesday (Jan. 11) afternoon from Angi Thomas at the State Utility Forecasting Group, (765) 494-4223, adthomas@purdue.edu.
To the News Service home page