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The great decoupling of power use and economic growth

A short Energy Information Administration analysis looks at how the link between power use and economic growth has been severed in some big countries, as the chart below shows.

Why it matters: Stagnant overall electricity growth in the U.S. has helped to shake up power markets as growing use of natural gas and renewables puts the squeeze on coal.

Reproduced from EIA Today in Energy, Nov. 20, 2017; Chart: Axios Visuals

  • One cause of the decoupling: The economies of major OECD nations like the U.S., U.K. and Japan have shifted away from manufacturing over time toward service-oriented output. "Service-based economies tend to use less electricity than economies with high levels of industrial activity, as commercial services are generally less energy-intensive compared with manufacturing," EIA notes.
  • Another cause: The manufacturing sectors have also become more technologically advanced and energy efficient.
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