Our Nation’s Economic Health is Directly Tied to the Grid
Monday, September 19, 2016
Many factors play into the health of the US economy but it is nearly impossible to separate energy use from economic growth. Every industry that fuels the US economy relies on an affordable and consistent source of electricity. From farming to the high tech industry, every sector of the economy utilizes electricity in some capacity and would be severely hampered without access to power.
The high tech industry is a great example of how electricity is the foundation for the continued growth of an economic sector that wouldn’t exist without a reliable source of power. Simply try to imagine how appealing computers, phones, and tablets would be without electricity to power and recharge them. Take a step beyond the physical devices that utilize power and you find another segment—software developers and engineers—that simply wouldn’t exist without consistent power for the devices that are their market.
Analysts use the term “intensity” to correlate energy use to the gross domestic product (GDP). The GDP is designed to gauge the economic health of a country. In the US, the electricity intensity, measured by electricity consumption per dollar of real GDP, shows a very close relationship between power generation and economic activity. In other words, when there is ample power, we use it and our economy grows.
A rise in electricity use has coincided with a growth in the GDP since the end of World War II. We continue to see this correlation today because of several factors, including the development of advanced electric technologies, population changes, and the relatively stable price of electricity.
In addition to acting as the foundation for growth in other sectors of the economy, the business of electric power itself is a big driver in economic stability. In 2005, the latest year that data was available, the electric power industry earned more than $268 billion in revenue from sales. In the US, the electric power industry represents 3% of the GDP. In fact, in terms of gross output, it’s one of the largest industries in the country, surpassing other giants like pharmaceuticals ($143 billion), air transportation ($122 billion), and natural gas ($91 billion).
The electricity industry is also a major employer, directly employing more than 400,000 people. These are jobs that can never be outsourced, which means that the electricity industry supports thousands of communities in our own country. There are hundreds of thousands of jobs that are created in the periphery of the electricity industry as well, as it is dependent on scores of businesses to operate each day, ranging from administrative services to the production and manufacturing of complex generating equipment.
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