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Energy Efficiency is ‘Cheapest Fuel’

Linda Hardesty

ACEEE Energy Manage

Energy efficiency is the cheapest method of providing Americans with electricity, according to a new report released by the American Council for an Energy-Efficient Economy (ACEEE).

Energy efficiency programs aimed at reducing energy waste cost utilities about 2.8 cents per kilowatt hour, while generating the same amount of electricity from sources such as fossil fuels can cost two to three times more.

“The cheapest energy is the energy you don’t have to produce in the first place,” said ACEEE Executive Director Steven Nadel.

The report “The Best Value for America’s Energy Dollar: A National Review of the Cost of Utility Energy Efficiency Programs” looks at the cost of running efficiency programs in 20 states from 2009 to 2012 and finds an average cost of 2.8 cents per kWh – about one-half to one-third the cost of alternative new electricity resource options.

Just last week, Lawrence Berkeley National Laboratory released a report that found energy efficiency programs that are paid for by utility customers cost, on average, about two cents per kilowatt-hour saved. The report did acknowledge that 2 cents was lower than other research groups had calculated, but said that perhaps it was because the Berkeley Lab study contained the largest sample of programs to date.

According to the ACEEE report, each dollar invested in electric energy efficiency measures yields $1.24 to $4.00 in total benefits for all customers, which include avoided energy and capacity costs, lower energy costs during peak demand periods like heat waves, avoided costs from building new power lines and reduced pollution.



2 comments on “Energy Efficiency is ‘Cheapest Fuel’

  1. The only problem with this is that energy efficiency is not a “type” of energy like the others, so analysis like this is at best a truism – of course it’s more efficient to make your existing energy systems more efficient rather than investing in new infrastructure to generate electricity. But efficiency does not generate energy on its own, so comparisons like this just don’t add up.

  2. The other problem is that the study accepts as true the utilities’ self-reported savings from their DSM / EE programs. Those numbers are not effectively challenged, critiqued or confirmed at most PSCs / PUCs across the land and are very suspect.

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