Tag Archives: efficiency

ACEEE Projects Significant Cost-Savings From U.S. Efficiency Policies – 1/2/17

Existing energy efficiency efforts are saving billions of dollars each year and could save trillions by 2040, according to the American Council for an Energy-Efficient Economy (ACEEE).

As shown in the graph below, the ACEEE believes that a few recent energy efficiency policies are helping Americans save about 2 quadrillion Btu of energy this year, or about 2% of all US energy use worth about $30 billion.

By 2030, the ACEEE projects these actions will save 10-14 quads of energy a year (10-14% of all energy use), and then save 13-17 quads by 2040. The ACEE estimates the present value of the energy savings through 2040 to be $2.5-2.9 trillion.

The ACEEE focused on the savings three energy efficiency policies set by the Obama administration:

First, the Department of Transportation (DOT) update fuel economy standards for light-duty vehicles and new standards for heavy-duty vehicles in 2007.

Second, the Department of Energy (DOE) set and updated appliance standards. The standards are to be updated over the next eight years, and in a recent paper, the ACEEE found that future updates could also yield significant savings.

Third, the EPA has begun to regulate carbon dioxide from other sources under the Clean Air Act, following a 2007 Supreme Court ruling. Most notably, in 2015, the, EPA issued regulations for existing power plants in [LU3] the Clean Power Plan. Large savings are expected if the CPP survives, though that is unlikely at this point.

The savings analyses follow similar methodologies to the ACEEE 2014 white paper, Government Works, and are explained in more detail there.

Energy Efficiency: Hidden Potential – 12/22/16

From energy security to energy access to air quality or climate goals, energy efficiency makes it easier to reach; however, it has rarely gotten the attention it deserves.

According to analysis by the IEA, “energy efficiency would have to provide more than 40% of total GHG emissions reductions” to meet the goal of limiting climate change to 2 degrees, the largest source of reductions in the IEA scenario. So why do renewables get so much more attention.

Clean energy benefits from clear, visible goal: production of electricity at a competitive price. Wind and solar power will see a monumental jump in popularity as they get close to price parity with fossil fuels — after all, there is no reasonable excuse for using fossil fuels if they aren’t at least a relatively cheap energy source. Lacking a cost advantage, however, renewables struggle to find a foothold.

Fortunately, energy efficiency has the potential to provide the same environmental benefits as clean power in areas where renewables aren’t competitive with fossil fuels.

Looking at the cost of solar power generation, clearly states on the left of the graph will benefit far less from a switch to solar than those on the right.

For such states, pursuing energy efficiency policies is much more likely to be cost-effective and politically viable than a push for renewables.

Yet while utilities and other power providers make energy choices between oil and other fuels based on price per kilowatt, energy efficiency lacks a comparable metric. As a result, large-scale efficiency programs rely heavily on government policy for support.

A large solar project can benefit from access to capital markets, economies of scale, potential returns acting as an incentive for developers, and other market forces.

On the other hand, efficiency projects don’t translate well to those market mechanisms. Even with a project on a similar scale, like building weatherization efforts, will generally come down to making sure thousands of household systems add up to large cost savings. The additional steps of making the value proposition to all of those homeowners in that distributed system creates costs and complications that few companies would bother with.

If the costs and benefits of energy efficiency were as easy to account for as renewable energy, efficiency would likely get a lot more attention. For now, only the government has the means to go through the trouble of dealing with such complexity so it may take some time for efficiency projects to come out in force.

Energy Efficiency Rising According to the IEA – 10/21/16

The world is using its energy more efficiently even as markets are flooded with cheap oil and gas, the International Energy Agency (IEA) reported in an analysis of global energy efficiency gains released earlier this month.

Energy intensity, which measures the amount of fuel consumed per unit of gross domestic product, fell 1.8% last year, triple the average rate over the past decade, the Paris-based IEA said.

“It’s becoming increasingly clear that energy efficiency needs to be central in energy policies,” said Fatih Birol, executive director of the IEA. “All of the core imperatives of energy policy — reducing energy bills, decarbonization, air pollution, energy security, and energy access — are made more attainable if led by strong energy efficiency policy.”

China reduced its energy intensity 5.6% last year, the most of all nations surveyed. The nation has invested $370 billion in efficiency from 2006 to 2014, saving as much as 497 gigawatts, equivalent to all of the country’s installed renewable generation, according to the IEA.

Government policy setting standards on everything from cars to buildings to appliances has been the main driver behind the efficiency push, the IEA said.

Stricter mileage rules on cars and light trucks led to an overall reduction of 2.3 million barrels of oil per day last year, or 2.5% of daily oil supply.

The IEA estimated its 29 member countries saved enough energy between 2000 and 2015 to power all of Japan for a year.

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The institution says even those gains aren’t enough to curb global warming. An overall decrease of at least 2.6% would be needed to reach the climate goals set out in the Paris agreement sealed in December, the report said.