In this post, we cover what happened in the electricity space in 2020.
Here are some of the main topics:
Pricing and Demand Decreases in 2020
2020 Wasn't All Bad, Right?
Life is still very far from what it used to be, but all we can do is make the best of it and be there for those we love. Speaking of making the best of it, some positives came out of the past 12 months regarding the electricity sector.
Allow me to explain some of those positives and other key takeaways from the 2020 electricity market.
Prices and Electricity Demand Both Decrease in 2020
As lockdowns were imposed and we remained home, electricity demand shifted in an unprecedented way. Commercial electricity demand decreased significantly since many businesses were shut down.
Inversely, residential demand spiked because many people stayed home all day and all night. Despite the respective decrease and increase, the overall demand for electricity decreased significantly, says the National Center for Biotechnical Information in a study.
Sure, lower demand typically drives down electricity prices, which occurred in 2020. But surprisingly, many Texans' electricity bills increased. How is that possible?
Texans were using more electricity since they spent more time at home. So just like water, groceries, or gas, using more leads to paying more. But hey, there's a silver lining--lower prices are still a good thing, especially when you're using more.
More Renewable Energy is Being Generated
Texas currently produces more electricity than any other state because of its size, diverse climate, and abundance of natural resources. According to a Dallas Morning News report, Texas reduced the country's coal-burning energy production in 2018 by nearly 33 percent.
Meanwhile, the Lone Star State also led the U.S. in renewable energy creation because of the amount of wind and solar production. In terms of wind energy, Texas would rank fifth globally if it was an independent country.
Due to the landscape and state's economic conditions, Texas remains an incredibly popular destination for renewable energy investments. Because of this, we can only expect wind and solar energy production to increase.
Additional renewable energy production will ultimately lower electricity prices because the costs of generating electricity decrease, says this Forbes Magazine article. As more renewable energy is generated, we'll continue to see the decommissioning of older coal plants.
Demand Will Most Likely Increase in 2021
As more and more businesses relocate to the Lone Star State, our grid's demand will continue to increase--both on the commercial and residential levels. For example, in 2020 alone, massive companies such as Tesla, Oracle, and Hewlett Packard Enterprise have announced plans to move to Texas.
Big businesses bring many employees and their families, which undoubtedly bolsters the state's economy. However, more people will be consuming electricity--both at the residential and commercial levels. Therefore, demand will increase as well.
As I've said, additional renewable energy will offset electricity prices, so Texans shouldn't expect price spikes! This is a unique and fortunate position for us! In fact, prices may even decrease, but more on that later.
New Changes Could Come in 2021
Given there's a new administration in the White House and a new majority in the Senate, there could be new standards and regulations put in place for the energy sector. These changes, if enacted, might impact Texas to some extent.
"There have been some things discussed at the federal level that could have huge impacts on us in Texas," Energy Ogre CEO Jesson Bradshaw says. "This next year, the market will digest the structural and regulatory changes that are coming in down the pipe."
"There have been some things discussed at the federal level that could have huge impacts on us in Texas. Next year the market will digest the structural and regulatory changes that are coming in down the pipe."-- Jesson Bradshaw, CEO, Energy Ogre
Jesson also says that the reserve margin--the amount of extra electricity generated to meet demand in the event of tremendous demand spikes to prevent blackouts--should increase this year as more solar power is generated. This should help lower or at least steady electricity prices, especially in the warmer months.
Prices Should Be Even Lower in 2021
In fact, Jesson is confident that prices will continue to get cheaper as we move into 2021. He says pricing should be at or below what it was last year.
As of January 13, Energy Ogre has seen firsthand historic, multi-year lows in pricing. With summer around the corner, you can expect prices to increase, but not to the heights of years passed.
In fact, prices have been so low lately that we've begun to blend and extend members' contracts to maximize their savings. Blending and extending a member's contract also locks in their savings over a longer period of time.
Now that's what I like to call a win-win! If you're an Energy Ogre member, then get excited because you're likely going to save a good amount of money compared to 2020.
Have You Signed Up With Energy Ogre Yet?
If you haven't, then don't sweat! But you should definitely, really strongly, very much consider doing it soon, okay?
If you've read any of my ramblings above or previous blog posts, then you have a good understanding of how complex and unpredictable the electricity industry is. Sure, this year may be somewhat stable.
But stability alone doesn't ensure you'll find the cheapest plan in your area when your current contract expires. Just because you consider your current rate "cheap" doesn't mean it is compared to other plans. In fact, 90% of Texans overpay for electricity.
Energy Ogre is the easiest way to ensure you'll never overpay for electricity again. Our platform analyzes historical weather data, considers how much electricity you use, the size of your home, and many other factors to find you the cheapest electricity plan!
We are unaffiliated with any retail electricity providers (REP), so our allegiance lies solely with our members. Therefore, our focus is on saving you the most money, contract after contract.
We do all the work for you, beginning with breaking up with your old provider and continuing with each new contract we enroll you in. Our service was designed and created to save Texans just like you time and money.
Shop for the things that matter--like clothes, shoes, fishing gear, and other fun things. Leave the boring stuff like electricity to us.