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The Energy Information Administration (EIA) predicts that demand for energy in the commercial sector is going to grow at an average annual rate of 1.7 percent, reaching 23.2 quadrillion Btu in 2020. Increasing square footage of commercial floor space, plus increased consumption per square footage (due to increased use of computers, office equipment, and telecommunications equipment) is expected raise the demand for energy in the commercial sector at even a faster rate.
Natural Gas Pricing
Most CHP generation technologies, such as reciprocating engines, combustion turbines and microturbines, use natural gas as a primary fuel. For CHP systems, fuel constitutes the majority of the variable/operating cost. High natural gas prices, such as those experienced in the recent years 2000, could have negative affects on the CHP market development.
In an EIA report titled "Annual Energy Outlook 2005," the following figure shows the historical and projected prices of natural gas through 2025.
Reference: EIA Annual Energy Outlook 2005
Electric Pricing and Capacity
The EIA's historical and projections through 2025 for average retail prices of electricity are shown in the following figure from its Annual Energy Outlook 2005.
Reference: EIA Annual Energy Outlook 2005
The cost of producing electricity is a function of fuel costs, operating and maintenance costs, and the cost of capital. EIA's historical data and projected fuel prices through 2025 for electricity generation are shown in the following figure.
Reference: EIA Annual Energy Outlook 2005
NOTE: All of the above information was obtained from the Energy Information Administration Web site. Unless otherwise noted the information was obtained form the EIA's Annual Energy Outlook 2005 with Projections to 2025.
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