How to make money from blackouts in America

With energy demand having risen by 35% over the last decade - and forecast to rise another 40% in the next 15 years, a threadbare power grid is struggling to handle the volumes.

In the summer of 2003, a simple power outage in a northeast Ohio town set off a chain reaction that would lead to more than $6bn worth of damage to the US economy. As a 350,000-volt power line brushed against a roadside tree, the local power grid collapsed, sending an electrical surge that short-circuited power systems from Detroit to New York and Toronto. Traffic lights failed, subways were evacuated and thousands of people were trapped in lifts in offices and apartments. More than 50 million people ended up in darkness in the biggest blackout in America's history.

Unfortunately, America hasn't seen the last of these blackouts. With energy demand having risen by 35% in the US over the last decade, and forecast to rise another 40% in the next 15 years, a threadbare power grid (which hasn't had any significant capacity added to it in 20 years) is struggling to handle the volumes. In response, American utilities have been falling over themselves to build new coal-fired power plants to meet demand.

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Eoin came to MoneyWeek in 2006 having graduated with a MLitt in economics from Trinity College, Dublin. He taught economic history for two years at Trinity, while researching a thesis on how herd behaviour destroys financial markets.