Energy Efficiency Ain’t Got No Respect

While politicians and planners focus on energy generation and fuels, it is energy efficiency that should be the first winner. As I tell my students as well as members of Congress — it is ALWAYS less expensive to save energy than generate any type of energy.

Economist Skip Laitner concluded in his August 2013 study, Linking Energy Efficiency to Economic Productivity: Recommendations for Improving the Robustness of the U.S. Economy: “Of the total high-quality energy consumed to support economic activity in 2010, only 14 percent was converted into useful work. In other words, the American economy wasted 86 percent of all the energy used that year in the production of goods and services. One can easily imagine that waste of this magnitude creates an array of costs that weakens the nation’s economic and social well-being.”

In a 2009 McKinsey & Co report, they stated the benefits this way: “The research shows that the US economy has the potential to reduce annual non-transportation energy consumption by roughly 23 percent by 2020, eliminating more than $1.2 trillion in waste — well beyond the $520 billion upfront investment (not including program costs) that would be required. The reduction in energy use would also result in the abatement of 1.1 gigatons of greenhouse-gas emissions annually — the equivalent of taking the entire U.S. fleet of passenger vehicles and light trucks off the roads.”

President Obama this past week proposed higher fuel standards for heavy duty trucks. An earlier rule, finalized in September 2011, improved the fleet’s fuel efficiency by between 9 percent and 23 percent, with the largest trucks experiencing the largest reductions. The Obama administration estimates that those standards, which applied to the model years 2014 through 2018, cost the industry roughly $8 billion but would save truck users about $50 billion in fuel costs over the lifetimes of the vehicles. 

The International Energy Agency’s 2011 report, Energy Efficiency Policy Opportunities for Electric Motor-Driven Systems, stated: “The majority of electric motors in use draw less than .75 kW of power in a variety of small applications, mostly in the residential and commercial sectors. Electric motors and the systems they drive are the single largest electrical enduse, consuming more than twice as much as lighting, the next largest enduse. They go on to say these motors consumer 43-46 percent of global electricity consumption. The breakdown of electric motors are: industrial motors at 64 percent, commercial at 20 percent, residential at 13 percent, and transportation/agriculture at 3 percent.

The U.S. Department of Energy (DOE) estimates that commercial refrigerators and freezers meeting the new standards sold over thirty years will reduce U.S. electricity consumption by about 340 billion kilowatt-hours and save businesses $12 billion. The new standards will also reduce CO2 emissions by 142 million metric tons, which is equivalent to the annual emissions of 30 million cars.

A recent study by the American Council for an Energy-Efficient Economy (ACEEE) estimates that Shaheen-Portman Bill which was just re-introduced in Congress, will create more than 190,000 jobs, save consumers $16.2 billion a year, and cut CO2 emissions and other air pollutants by the equivalent of taking 22 million cars off the road — all by 2030. The bill strengthens building energy codes, sets savings targets, and establishes an approach for commercial building improvements financing for energy efficiency.

The Environmental Protection Agency (EPA) energy efficiency fact sheet states, “Studies show that these efforts could help reduce the nation’s total energy demand by 20 percent by 2025, cutting the expected growth in electricity demand in half and the growth in natural gas by 50 percent or more. This adds up to hundreds of billions of dollars on saved energy costs over the next 10-15 years. It could help prevent of delay the need for building dozens of new power plants or other new energy infrastructure.”

So this random selection of studies and actions result in over $2 trillion dollars worth of savings along with the water, pollution, and greenhouse gases that would have been required to produce the energy.  We need to push for short term passage of the bipartisan energy efficiency bill introduced by and co-authored by Senators Jeanne Shaheen (D-NH) and Rob Portman (R-OH). The Shaheen-Portman bill is the bellweather as to whether the US Congress can save Americans consumers money, improve their health, and create jobs. And yes, energy efficiency deserves our attention, big time.

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Scott, founder and president of The Stella Group, Ltd., in Washington, DC, is the Chair of the Steering Committee of the Sustainable Energy Coalition and serves on the Business Council for Sustainable Energy, and The Solar Foundation. The Stella Group, Ltd., a strategic marketing and policy firm for clean distributed energy users and companies using renewable energy, energy efficiency and storage. Sklar is an Adjunct Professor at The George Washington University teaching two unique interdisciplinary courses on sustainable energy, and is an Affiliated Professor of CATIE, the graduate university based in Costa Rica. . On June 19, 2014, Scott Sklar was awarded the prestigious The Charles Greely Abbot Award by the American Solar Energy Society (ASES) and on April 26, 2014 was awarded the Green Patriot Award by George Mason University in Virginia.

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