With all signs pointing to a continued population boom and steady economic growth over the next several years, key parts of the Southeast will see a dramatic upturn in the amount of power they will require over the next decade, an executive with a leading economic forecasting firm said last Thursday. One region alone, the South Atlantic, is going to need to be supplied with 30% more power over the next 10 years than was supplied in 2000, Mary Novak, managing director-energy consulting with DRI-WEFA, said at a conference looking at the Southeast’s energy infrastructure.

At the FERC-sponsored conference in Orlando, Novak offered projections for future energy use in the Southeast markets, focusing her remarks on the South Atlantic and East South Central regions.

Novak detailed population expectations for these regions relative to the U.S. using average annual growth rates over a five-year period. “During the previous five-year period, ’95 to 2000, the South Atlantic region had about a 1.7% annual population growth and the East South Central region had a 1% growth,” Novak said.

She said that over the 25-year period from about 1985 up to 2010, the South Atlantic region will increase by about 20 million people. “That’s an enormous rate of increase and huge population bubble that’s coming through the South Atlantic region here, with actually no end in sight,” Novak said.

In looking at real gross output, Novak said that between 1995 and 2000, the South Atlantic led the country in terms of its average annual rate of increase, growing 5% per year. “Over the next decade, that’s going to slow somewhat, but not a lot,” she said. “The rate of change, year-over-year, is expected for this year to be just slightly above 2%, popping up to 3% next year and then escalating up to about an average annual rate of 4% per year for almost the following 10 years.”

As for the East South Central region, Novak said that the region will have a slightly similar rate of growth short-term, “but again it will pop up to about a 2.7% rate of growth and then move at 3, 3.1, 3.2 for the rest of the decade, putting enormous pressure on infrastructure to support that rate of growth.”

In addition, Novak said it was important to look at population, non-manufacturing employment and personal income trends in these regions when looking at the rate of growth of electricity. “They all play a part on pushing that electricity growth up,” she pointed out.

How does all of this translate into additional demand for power in these regions? “In the South Atlantic region, over the next 10 years we’re going to need to supply 30% more power than was supplied in the year 2000 to meet or to support the economic growth projections that go along with our population estimates,” Novak said. “So that means for all the capacity, for all the power that was sold in the year 2000, you are going to need to be able to produce and get to people 30% more within the coming decade.”

The East South Central region will have a little bit slower rate of increase, she went on to say, “but it also will require more than 20% more power delivered to homes and businesses over the next decade.”

While these are dramatic changes, they are still “fundamentally an improvement in electric intensity in these regions,” Novak said. “So that means while we’re having to increase power 30% in the South Atlantic region, we are continuing to make fundamental improvements to position us better for growth in the long term.”

“These are highly electric-intensive regions relative to the rest of the United States and…the average electric intensity is declining over the period. So that means we are making fundamental technological improvements in end-use demand so that we can get the most out of our electric dollar.”

In order to support the electric requirements of this “dynamic and growing economy, we’re going to need to build 30% more capacity,” the consultant went on to say. “Right now, our expectation is that about one-third to two-thirds — so maybe about a half of the capacity — has been planned,” she said. “It’s not expected to come online all that quickly, but it has been planned.”

“And you can see that that bubble, in terms of pushing up the capacity during the first five years of the forecast, is dependent upon getting that planned capacity online and running. It’s a huge amount of capacity, though.” Specifically, the consultant said that the South Atlantic region is looking at having to add an incremental 60 gigawatts of capacity over the next 10 years, while East South Central is facing the need to add approximately 25 gigawatts of capacity over the next 10 years.

Thursday’s conference was the latest in a series of meetings the Commission has sponsored looking at energy infrastructure issues throughout the country. Previous conferences have focused on the West and Northeast parts of the U.S.

©Copyright 2002 Intelligence Press Inc. Allrights reserved. The preceding news report may not be republishedor redistributed, in whole or in part, in any form, without priorwritten consent of Intelligence Press, Inc.