Energy Demand
Average Energy Use per Person
Increases Through 2030
The future path of U.S. energy demand will depend on trends in population,
economic growth, energy prices, and technology adoption. AEO2007 cases
developed to illustrate the uncertainties associated with those factors
include low and high economic growth cases, low and high price cases, and
2006 and high technology cases (see Appendixes B, C, D, and E).
Population growth is a key determinant of energy demand for housing, services,
and travel. Its impact is magnified by changes in energy consumption per
capita, which reflect the combined effects of economic growth, energy prices,
and other factors. In the reference case, energy consumption per capita
grows by 0.3 percent per year from 2005 to 2030, faster than it has in
recent history (Figure 33), as a result of projected growth in real disposable
income per capita.
Although the Nation’s reliance on imported fuel has been growing, the economy
is becoming less dependent on energy in general. U.S. energy intensity
(energy use per 2000 dollar of GDP) declines by an average of 1.5 percent
per year in the low growth case, 1.8 percent in the reference case, and
1.9 percent in the high growth case. Efficiency gains and faster growth
in less energy-intensive industries account for most of the projected decline,
more than offsetting growth in demand for energy services in buildings,
transportation, and electricity generation. The decline is more rapid in
the high economic growth case, because the additional growth is concentrated
in less energy-intensive industries. In all three growth cases, as energy
prices moderate over the longer term, energy intensity declines at a slower
rate.
Coal and Liquid Fuels Lead Increases in Primary Energy Use
Total primary energy consumption, including energy for electricity generation,
grows by 1.1 percent per year from 2005 to 2030 in the reference case (Figure
34). Fossil fuels account for 87 percent of the growth. The increase in
coal use occurs mostly in the electric power sector, where strong growth
in electricity demand and favorable economics under current environmental
policies prompt coal-fired capacity additions. About 61 percent of the
projected increase in coal consumption occurs after 2020, when higher natural
gas prices make coal the fuel of choice for most new power plants. Over
the longer term, growth in natural gas consumption for power generation
is restrained by its high price relative to coal, although natural gas
use increases in the near term. Industry and buildings account for about
90 percent of the increase in natural gas consumption from 2005 to 2030.
Transportation accounts for 94 percent of the projected increase in liquids
consumption, dominated by growth in fuel use for light-duty vehicles. Fuel
use by freight trucks, second in energy use among travel modes, grows by
1.8 percent per year on average, the fastest annual rate among the major
forms of transport. The remainder of the liquids growth in the AEO2007 reference case occurs in the industrial sector, primarily in refineries.
The projected trend in liquid fuels use in the buildings sectors is relatively
flat in the reference case.
AEO2007 projects rapid percentage growth in renewable energy production,
partly as a result of State mandates for renewable electricity generation.
Additions of new nuclear power plants are also projected, spurred by PTCs
available under EPACT2005.
Liquid Fuels and Electricity Lead Growth in Energy Consumption
Delivered energy use (excluding losses in electricity generation) grows
by 1.1 percent per year from 2005 to 2030 in the reference case. Liquid
fuels use, which makes up more than one-half of total delivered energy
use, grows by about the same percentage (Figure 35). About 93 percent of
the projected increase is in the transportation sector, which depends heavily
on liquid fuels. Even in the high price case, liquid fuels use for transportation
grows by 0.9 percent per year on average through 2030. Growing population,
incomes, and economic output spur travel demand, while fuel efficiency
improves only slightly. With varying assumptions on population and economic
growth, average annual growth in delivered energy use from 2005 to 2030
ranges from 0.7 percent in the low growth case to 1.5 percent in the high
growth case.
Recent trends in electricity use are expected to continue, given strong
growth in commercial floorspace, continued penetration of electric appliances,
and increases in industrial output. Natural gas use grows more slowly than
overall delivered energy demand, in contrast to its more rapid growth during
the 1990s. Natural gas consumption in the residential sector is projected
to grow by less than 10 percent over the 25-year projection.
End-use demand for energy from marketed renewables, such as wood, grows
by 1.1 percent per year. Industrial biomass, mostly a byproduct fuel in
the pulp and paper industry, is the largest component of end-use renewable
fuel. Renewable energy from solar and geothermal heat pumps more than doubles
over the projection, but those sources remain at less than 1 percent of
residential delivered energy use.
U.S. Primary Energy Use Climbs to 131 Quadrillion Btu in 2030
Primary energy use (including electricity generation losses) is projected
to increase by 31 percent over the next 25 years in the reference case
(Figure 36). The projected growth rate of energy consumption approximately
matches the average from 1981 to 2005. Demand for energy in the early 1980s
fell in the face of recession, high energy prices, and changing regulations;
but beginning in the mid-1980s, declining real energy prices and economic
expansion contributed to a marked increase in energy consumption. The long-term
upward trend in energy use is projected to continue in the AEO2007 reference
case, but the growth is moderated by rising energy prices.
The most rapid growth in sectoral energy use is in the commercial sector,
where services continue to expand more rapidly than the economy as a whole.
The growth rate for residential energy use is about half that for the commercial
sector, with demographic trends being a dominant factor. Transportation
energy use grows by 1.4 percent per year from 2005 to 2030 (about the same
as the growth rate from 1980 to 2005), despite relatively high fuel prices.
Increases in travel by personal and commercial vehicles are only partially
offset by vehicle efficiency gains.
In the reference case, primary energy use grows more slowly in the industrial
sector than in the other sectors, with efficiency gains, higher real energy
prices, and shifts to less energy-intensive industries moderating the expected
growth. In the high economic growth case, however, the projected increase
in industrial energy use is almost double that in the reference case.
Residential Energy Use per Capita Varies With Technology Assumptions
Residential energy use per person has remained fairly constant since 1990
(taking into account year-to-year fluctuations in weather), with increases
in energy efficiency offset by consumer preference for larger homes and
by new residential uses for energy. As the U.S. population has shifted
to the South and West, all-electric homes have become more prevalent and
electricity use for air conditioning has increased, leading to a rise in
electricity consumption per capita while natural gas use and liquid fuels
use per capita have fallen. In the reference case, however, as the population
shift to warmer climates continues, slower penetration of new energy-using
appliances and increases in efficiency are projected to reduce energy use
per capita.
In the AEO2007 projections, residential energy use per capita changes with
assumptions about the rate at which more efficient technologies are adopted.
The 2006 technology case assumes no increase in the efficiency of equipment
or building shells beyond those available in 2006. The high technology
case assumes lower costs, higher efficiencies, and earlier availability
of some advanced equipment. In the reference case, residential energy use
per capita is projected to fall below the 1990 level after 2020. The 2006
technology case approximates an upper bound on energy use per capita in
the future: delivered energy use per capita remains above the 1990 level
through 2030, when it is 4 percent higher than projected in the reference
case (Figure 37). The high technology case indicates a lower bound for
energy use per capita in the cases considered here, falling below the 1990
level after 2013 and reaching a 2030 level that is 7 percent below the
reference case projection.
Household Uses for Electricity Continue To Expand
Over the past several decades, residential electricity demand has increased
as more uses for electricity have emerged. The reference case projects
further increases in residential electricity consumption, averaging 1.3
percent per year from 2005 to 2030 (Figure 38), as more electric devices
and larger television sets with digital capability continue to penetrate
residential markets. Two alternative cases—the high economic growth case
and the high technology case— provide high and low ranges, respectively,
for the projections. In the high growth case, population increases lead
to more households, which use more electric appliances. In the high technology
case, more efficient houses and appliances lead to lower electricity use.
The 2030 projections for residential electricity use in the two cases are
0.4 quadrillion Btu higher and 0.6 quadrillion Btu lower, respectively,
than the reference case projection of 6.5 quadrillion Btu.
Changes in natural gas and liquid fuels consumption in the residential
sector over the past 20 years have been less dramatic. For residential
natural gas consumption, the reference case projects annual growth averaging
0.4 percent from 2005 to 2030, and for liquid fuels use a slight decrease
is projected. In the high economic growth case, the sector’s natural gas
use in 2030 is 0.3 quadrillion Btu higher than the reference case level
of 5.5 quadrillion Btu; in the high technology case it is 0.3 quadrillion
Btu lower. For liquid fuels use, the low and high price cases provide high
and low estimates, respectively, both varying in 2030 by 0.1 quadrillion
Btu from the reference case level (1.5 quadrillion Btu). With relatively
few new homes using oil furnaces, the economic growth cases do not have
as much effect on residential liquid fuels use.
Increases in Energy Efficiency Are Projected To Continue
The energy efficiency of new household appliances plays a key role in determining
the types and amounts of energy used in residential buildings. As a result
of stock turnover and purchases of more efficient equipment, energy use
by residential consumers, both per household and per capita, has fallen
over time. In the 2006 technology case, which assumes no efficiency improvement
for available appliances beyond 2006 levels, normal stock turnover results
in higher average energy efficiency for most residential equipment in 2030,
as older appliances are replaced with more efficient models from the 2006
stock (Figure 39).
The greatest gains in residential energy efficiency are projected in the
best available technology case, which assumes that consumers purchase the
most efficient products available at normal replacement intervals regardless
of cost, and that new buildings are built to the most energy-efficient
specifications available, starting in 2007. In this case, residential delivered
energy consumption in 2030 is 27 percent less than projected in the 2006
technology case and 24 percent less than in the reference case. Purchases
of more energy-efficient products, such as solid-state lighting and condensing
gas furnaces, reduce the amount of energy used without lowering service
levels.
Several current Federal programs, including Zero Energy Homes and ENERGY
STAR Homes, promote the use of efficient appliances and building envelope
components, such as windows and insulation. In the best available technology
case, use of the most efficient building envelope components available
can reduce heating requirements in an average new home by nearly 30 percent.
Rise in Commercial Energy Use per Capita Is Projected To Continue
In the commercial sector, delivered energy consumption per capita increased
by 8 percent from 1980 to 2005, primarily as a result of rising electricity
use as the Nation moved increasingly to a service economy. Commercial energy
use per person is projected to increase more rapidly in the reference case,
by a total of 19 percent from 2005 to 2030, as the transition to a service
economy continues and energy prices moderate from current levels. Depending
on assumptions about the availability and adoption of energy-efficient
technologies, the size of the projected increase varies from a low of 15
percent in the high technology case to a high of 25 percent in the 2006
technology case (Figure 40).
The reference case assumes future improvements in efficiency for commercial
equipment and building shells, as well as increased demand for energy services.
While commercial energy use per capita increases by 19 percent from 2005
to 2030 in the reference case, commercial energy intensity (delivered energy
consumption per square foot of floorspace) shows little change, increasing
by only 1 percent. The 2006 technology case assumes the same laws and regulations
as the reference case but with no increase in the energy efficiency of
commercial equipment and building shells beyond those available in 2006.
The result is a 5-percent increase in commercial delivered energy use in
2030 relative to the reference case. In the high technology case, assuming
earlier availability, lower costs, and higher efficiencies for more advanced
equipment and building shells, delivered energy consumption in 2030 is
4 percent below the reference case projection.
Electricity Leads Expected Growth in Commercial Energy Use
Commercial floorspace growth and, in turn, commercial energy use are driven
by trends in economic and population growth. In the AEO2007 projections,
growth in disposable income leads to increased demand for services from
hotels, restaurants, stores, theaters, galleries, arenas, and other commercial
establishments, which in turn are increasingly dependent on electricity
both for basic services and for business services and customer transactions.
In addition, the growing share of the population over age 65 increases
demand for healthcare and assisted living facilities and for electricity
to power medical and monitoring equipment in those facilities. The reference
case projects further increases in commercial electricity use, averaging
2.0 percent per year from 2005 to 2030 (Figure 41). The high and low economic
growth cases provide high and low ranges for the average annual growth
rate of commercial electricity demand from 2005 to 2030, at 2.3 percent
and 1.6 percent, respectively.
For commercial natural gas use (primarily for space heating and water heating),
the reference case projects average annual growth of 1.3 percent from 2005
to 2030, and for liquid fuels use the projected average annual growth rate
is 0.2 percent. The alternative projections for natural gas use in 2030
range from a high of 4.7 quadrillion Btu in the high growth case to 4.0
in the low growth case, compared with 4.4 in the reference case. For liquid
fuels use, the low and high oil price cases provide high and low estimates,
respectively, which in 2030 vary by 0.2 and 0.1 quadrillion Btu from the
reference case projection of 0.8 quadrillion Btu.
Current Technologies Provide Potential Energy Savings
The stock efficiency of energy-using equipment in the commercial sector
increases in the AEO2007 reference case. Adoption of more energy-efficient
equipment is expected to moderate the projected growth in demand, in part
because of building codes for new construction and minimum efficiency standards,
including those in EPACT2005; however, the long service lives of many kinds
of energy-using equipment limit the pace of efficiency improvements.
The most rapid increase in overall energy efficiency for the commercial
sector is projected in the best technology case, which assumes that only
the most efficient technologies are chosen, regardless of cost, and that
building shells in 2030 are 50 percent more efficient than projected in
the reference case. With the adoption of improved heat exchangers for space
heating and cooling equipment, solid-state lighting, and more efficient
compressors for commercial refrigeration, commercial delivered energy consumption
in 2030 in the best technology case is 13 percent less than projected in
the reference case and 17 percent less than in the 2006 technology case.
In the 2006 technology case, which assumes equipment and building shell
efficiencies limited to those available in 2006, energy efficiency in the
commercial sector still is projected to improve from 2005 to 2030 (Figure
42), because the technologies available in 2006 can provide savings relative
to commercial equipment currently in place. When businesses consider equipment
purchases, however, the additional capital investment needed to buy the
most efficient technologies often carries more weight than do future energy
savings.
Advanced Technologies Could Slow Electricity Consumption in Buildings
Alternative technology cases for the residential and commercial sectors
vary the assumptions about availability and market penetration of distributed
generation technologies. In the high technology case, buildings generate
6.2 billion kilowatthours (38 percent) more electricity in 2030 than the
16.1 billion kilowatthours projected in the reference case (Figure 43),
most of which offsets residential and commercial electricity purchases.
In the best available technology case, electricity generation in buildings
in 2030 is 27.4 billion kilowatthours (171 percent) higher than in the
reference case, with solar systems responsible for 78 percent of the increase.
The optimistic assumptions of the best technology case benefit solar PV
systems in particular, because there are no fuel expenses for solar systems.
In the 2006 technology case, assuming no technological progress or cost
reductions after 2006, electricity generation in buildings in 2030 is 6.1
billion kilowatthours (38 percent) lower than in the reference case.
Some of the heat produced by fossil-fuel-fired generating systems may be
used to satisfy heating needs in CHP applications, increasing system efficiency
and enhancing the attractiveness of distributed generation technologies
for buildings. On the other hand, additional natural gas use for distributed
generation systems in the high technology and best technology cases offsets
some of the energy cost reductions that result from improvements in end-use
equipment and building shells. In addition, if natural gas prices increased
substantially, commercial establishments could find electricity purchases
more economical than the installation of distributed generation technologies.
Economic Growth Cases Show Range for Projected Industrial Energy Use
In the AEO2007 projections, the path of industrial delivered energy consumption
varies significantly, depending on the assumptions used in different cases.
The projections for industrial sector energy consumption in 2030 range
from 26.0 quadrillion Btu in the low economic growth case to 35.3 quadrillion
Btu in the high growth case, with the reference case projection approximately
midway between the two at 30.5 quadrillion Btu (Figure 44).
In the refining industry, reliance on nonconventional inputs for liquid
fuels production is projected to increase rapidly. As a result, energy
consumption by refineries in the reference case increases from 3.7 quadrillion
Btu in 2005 to 6.3 quadrillion Btu in 2030. More than 60 percent of the
increase is the result of increased coal use for CTL production and biomass
use for ethanol production.
Non-fuel uses of energy transform normal energy inputs into other, non-energy
products. In 2005, the U.S. chemical industry converted petroleum products
with an estimated energy value of 3.4 quadrillion Btu into products such
as plastics and fertilizers. Such non-fuel use is projected to increase
in the reference case, to 3.9 quadrillion Btu in 2030. In addition, petroleum
use to make asphalt and road oil, which are necessary components of construction
industry activities, is projected to increase from 1.3 quadrillion Btu
in 2005 to 1.4 quadrillion Btu in 2030. If energy consumption in the refining
sector were excluded, non-fuel uses of petroleum would account for all
the projected increase in industrial sector petroleum use in the reference
case.
Energy-Intensive Industries Grow Less Rapidly Than Industrial Average
One of the most important determinants of industrial sector energy consumption
is growth in value of shipments. In AEO2007, average annual growth in value
of shipments for the industrial sector from 2005 to 2030 ranges from 1.2
percent per year in the low economic growth case to 2.8 percent per year
in the high growth case, with the reference case projection approximately
midway between the two at 2.0 percent per year. The range of growth in
the individual subsectors is even wider.
By manufacturing subsector, the projected rate of growth in value of shipments
in the reference case ranges from a low of 0.6 percent per year (wood products)
to a high of 4.6 percent per year (computers). In general, the projected
growth rates for the energy-intensive manufacturing subsectors are lower
than those for the non-energy-intensive subsectors. Glass is the only energy-intensive
subsector with a projected growth rate above 2 percent per year in the
reference case.
The projected growth rates for value of shipments in the industrial subsectors
in the high and low economic growth cases generally are symmetrical around
the reference case (Figure 45). Industries with the most rapid projected
growth in the reference case show the widest ranges, so that the pattern
of faster value of shipments growth for the non-energy-intensive manufacturing
sectors in the reference case is also evident in the high and low economic
cases.
Energy Consumption Growth Varies Widely Across Industry Sectors
The average annual growth rate for total delivered energy consumption in
the industrial sector from 2005 to 2030 ranges from an increase of 0.2
percent per year to an increase of 1.4 percent per year in the alternative
cases for AEO2007. The widest variation is across the economic growth cases.
Again, the range of the projections for individual subsectors is wider.
In the reference case, energy consumption growth rates for the manufacturing
subsectors range from an increase of 3.0 percent per year (computers and
electronics) to a decrease of 0.5 percent per year (aluminum). Delivered
energy consumption growth in some of the energy-intensive industries (aluminum
and steel) is held down by expected changes in production technology over
the projection period. In general, the subsectors with the highest projected
growth rates in energy consumption are those with the highest projected
growth rates in value of shipments (computers and glass). The petroleum
refining sector is an exception. As more refineries shift to alternative
feedstocks for liquids production (biomass, coal, heavier crude oil) they
use more energy per unit of output than is used for traditional petroleum-based
refining.
The projected rates of growth in energy consumption in the alternative
economic growth cases are generally symmetric around the reference case
(Figure 46); however, the rate of growth is moderated by the level of investment
in each case.
Energy Intensity in the Industrial Sector Continues To Decline
From 1980 to 2004 [162], energy consumption in the industrial sector was
virtually unchanged, growing by a total of 3.1 percent, while value of
shipments increased by 50 percent. Thus, industrial delivered energy use
per dollar of industrial value of shipments declined by an average of 1.6
percent per year from 1980 to 2004 (Figure 47). Since 1990, however, the
rate of decline in the sector’s energy intensity has slowed: a 29-percent
increase in industrial output from 1990 to 2004 resulted in a 6.5-percent
increase in energy use and a 1.4-percent average annual decline in energy
intensity.
Factors contributing to the decline in industrial energy intensity include
a greater focus on energy efficiency after the energy price shocks of the
1970s and 1980s and a reduction in the share of industrial activity accounted
for by the most energy-intensive industries. The energy-intensive industries’
share of industrial output fell from 24 percent in 1980 to 21 percent in
2004.
The industrial value of shipments is projected to grow by 65 percent overall
from 2005 to 2030, and the share attributed to the energy-intensive industries
is projected to fall from 20 percent in 2005 to 17 percent in 2030. Consequently,
even if no specific industry showed a reduction in energy intensity, the
aggregate energy intensity of the industrial sector as a whole would decline
[163].
Expected Declines in Energy Intensity Vary by Industry and Technology
Energy intensity in the industrial subsectors can change for a variety
of reasons. For example, no new primary smelting capacity is expected to
be constructed in the U.S. aluminum industry, and secondary smelting, a
less energy-intensive process of melting scrap, is expected to become the
subsector‘s dominant technology. As a result, the reference case projection
for energy intensity in the aluminum industry in 2030 is nearly one-third
less than the 2005 level. In the petroleum refining industry, projected
increases in coal use for CTL production result in increasing energy intensity,
at an average rate of 1.0 percent per year from 2005 to 2030 [164].
A range of potential energy intensity and energy consumption outcomes for
the industrial sector were developed for AEO2007. Energy intensity in the
refining industry does not change in the 2006 technology and high technology
cases [165]. Excluding refineries, projected average annual decreases in
aggregate industrial energy intensity range from 1.0 percent per year in
the 2006 technology case to 1.7 percent per year in the high technology
case (Figure 48). In the high technology case, industrial delivered energy
consumption in 2030 (excluding refining) is 1.4 quadrillion Btu less than
in the reference case for the same level of output; in the 2006 technology
case, it is 2.9 quadrillion Btu higher than in the reference case. Although
the energy efficiency of new equipment is assumed to remain at 2006 levels
in the 2006 technology case, average efficiency improves as old equipment
is retired.
Transportation Energy Use Is Expected To Increase
Total delivered energy consumption in the transportation sector is projected
to grow at an average annual rate of 1.4 percent in the AEO2007 reference
case, from 28.1 quadrillion Btu in 2005 to 39.3 quadrillion Btu in 2030
(Figure 49). The reference case projection is consistent with recent historical
trends.
Energy demand for transportation is influenced by a variety of factors,
including economic growth, population growth, fuel prices, and vehicle
fuel efficiency (for example, economic growth drives energy demand for
heavy vehicle travel, and fuel prices and economic growth drive energy
demand for light-duty vehicle travel). AEO2007 provides several cases to
examine the impacts of those factors on delivered energy demand. In 2030,
the sector’s delivered energy demand is about 10 percent higher in the
high economic growth case and 10 percent lower in the low economic growth
case than projected in the reference case, and it is about 10 percent lower
in the high world oil price case and 5 percent higher in the low oil price
case than in the reference case.
By transportation mode, the most rapid increase in the share of total delivered
energy demand for transportation is projected for heavy vehicle travel,
which includes medium and large freight trucks and buses. Energy demand
for heavy vehicles accounted for 18 percent of the sector’s total delivered
energy demand in 2005, and in 2030 it accounts for 20 percent of the total
in the reference case. Energy demand for air travel accounts for 10 percent
of the total in 2030, the same as in 2005, because infrastructure constraints
limit the potential growth of air travel in the United States.
Higher Prices Slow Increase in Demand for Light-Duty Vehicle Fuels
Delivered energy consumption for light-duty vehicle travel is projected
to grow at an average annual rate of 1.3 percent in the reference case,
from 16.9 quadrillion Btu in 2005 to 23.5 quadrillion Btu in 2030 (Figure
50). In 1980, energy use for light-duty vehicle travel totaled 11.8 quadrillion
Btu.
The two factors that have the greatest impact on energy demand for light-duty
vehicles in AEO2007 are fuel price and, to a lesser extent, disposable
income. The high economic growth case and high world oil price case provide
higher and lower ranges, respectively, for the projections. The high growth
case projects 25.3 quadrillion Btu, and the high price case projects 20.3
quadrillion Btu, for light-duty vehicle energy use in 2030.
The projections in the low world oil price case are nearly the same as
those in the high economic growth case. As compared with the reference
case, increased travel demand in the high growth case results in an 8-percent
increase in energy use for light-duty vehicles in 2030; in the low price
case, the combination of lower vehicle fuel economy and higher travel demand
leads to a 7-percent increase.
Energy demand for light-duty vehicle travel in 2030 is lower in both the
high price case and the low growth case than projected in the reference
case, by 14 percent and 8 percent, respectively. Lower travel demand is
the chief reason for the decrease in both cases. In addition, the high
price case projects a 9-percent increase in light-duty vehicle fuel economy
in 2030 relative to the reference case projection.
New Technologies Promise Improved Fuel Economy for Light-Duty Vehicles
In 2005, U.S. sales of light trucks account for more than one-half of all
new light-duty vehicles sold (as compared with only one-quarter of all
new light-duty vehicle sales in 1980) [166]. Consequently, despite fuel
economy improvements for cars and light trucks over the past years, the
average fuel economy of new light-duty vehicles has declined from a 1987
peak of 26.2 miles per gallon to 25.2 miles per gallon in 2005 (Figure
51).
In March 2006, NHTSA finalized a new fuel economy standard for light trucks,
based on vehicle footprint and product mix offered by the manufacturer
(see “Legislation and Regulations”). The new CAFE standard, coupled with
technological advances, is expected to have a positive impact on the fuel
economy of new light-duty vehicles. In the reference case, average fuel
economy for new light-duty vehicles is projected to increase to 29.2 miles
per gallon in 2030. Additional improvement is projected in the high technology
and high price cases, as a result of consumer demand for more fuel-efficient
cars and improved economics that make producing them more profitable.
In the 2006 technology and low oil price cases, the projections for light-duty
vehicle fuel economy in 2030 are lower than those in the reference case,
but they still are higher than the 2005 CAFE standard for cars and the
2011 CAFE standard for light trucks. In the low price case, fuel economy
for new light-duty vehicles in 2030 is 3.3 percent lower than projected
in the reference case—due to consumer preference for more powerful vehicles
over fuel economy—and in the 2006 technology case it is 7 percent lower
than in the reference case.
Unconventional Vehicle Technologies Exceed 27 Percent of Sales in 2030
Concerns about oil supply, fuel prices, and emissions continue to drive
the development and market penetration of unconventional vehicles (vehicles
that can use alternative fuels or employ electric motors and advanced electricity
storage, advanced engine controls, or other new technologies). Without
new legislation or regulation, sales of unconventional vehicles total 5.5
million units in 2030 in the reference case (Figure 52), making up more
than 27 percent of total new light-duty vehicle sales. In the high oil
price case, unconventional vehicle sales total 8.1 million units, or more
than 40 percent of new light-duty vehicle sales, as compared with 28 percent
of sales in the low economic growth case.
Hybrid vehicles are becoming more popular, and in the reference case they
are projected to top 2 million vehicles sold in 2030, as manufacturers
continue to introduce new product lines. Light-duty diesel engines with
advanced direct injection, which can significantly reduce exhaust emissions,
are projected to capture 6 percent of the new light-duty vehicle market
in 2030. The availability of ULSD and biodiesel fuels, along with advances
in emission control technologies that reduce criteria pollutants, increase
the projected sales of unconventional diesel vehicles.
Currently, manufacturers selling FFVs receive fuel economy credits that
count toward their compliance with CAFE regulations. Continued commitment
to the technology and increased product offerings are expected to increase
sales of FFVs to 2 million units in 2030 in the reference case, from the
2005 level of 612,400 units.
Market Trends Section Notes |
