Energy Efficiency Touted As Cheaper and Better Than Building New Power Plants

April 6, 2016 By Ken Silverstein

ee picDubbed as a low-hanging fruit, it appears that energy efficiency has yet to be fully picked, or more accurately, it has yet to become fully ripe as products and services are still getting rolled out. It’s no wonder then that a leading trade group representing such interests is releasing a report saying that it is much cheaper to save energy energy than to produce it: negawatts, if you will.

The American Council for an Energy Efficient Economy — ACEEE for short — is saying that it will cost 3.5 cents a kilowatt hour saved to implement some successful energy-saving programs. That’s a lot less than building a new power plants and it is less than previous estimates released by the US Environmental Protection Agency, at 7.5 cents per kWh saved, at least in the early going. The council’s estimate, though, is still greater than that of the Lawrence Berkeley National Laboratory at 2.4 cents.

“In our view … EPA is overly conservative,” says the ACEEE study. “Most likely, energy efficiency will cost program administrators under 4 cents per kWh saved, much less than a new power plant. EPA’s very conservative numbers are higher, but still show an energy efficiency cost that is likely to be less than most new power plants.”

How is all this playing out in the market? According to Adam Bickford with the Southwest Energy Efficiency Project, utilities are offering everything from commercial lighting  products to heating and cooling equipment. Two examples: Tucson Electric Power, which he says has saved more than 31 million kilowatt hours since it started up in 2012 by making lighting retrofits.

And second, Xcel Energy Colorado, which has offered commercial heating and cooling since last September. In the fourth quarter alone, he says that 271 approved heating and cooling units saved 684,000 kilowatt hours.

In New York, meanwhile, Governor Andrew Cuomo says that 112,000 residential and commercial energy efficiency projects have been completed or are under development. Those projects, which involve 22,000 commercial buildings, will attract $766 million in private investment and will save customers $341 million on their energy bills each year.

The investments in energy efficiency are all part of New York’s effort to consume half of its energy using renewables by 2030, under its so-called Reforming Energy Vision Strategy. “Smarter, more efficient energy infrastructure is crucial to building a better future for New York State,” said Governor Cuomo, in a press release.

“We have made tremendous progress in creating cleaner and greener communities, savings hundreds of millions of dollars for consumers every year and jumpstarting major private sector investments statewide,” he adds.  how much does energy efficiency cost

Energy efficiency, though, may sound innocuous. But it can have political overtones. Consider that the Obama administration has put billions into technologies that do everything from weatherize homes to making cars more fuel efficient to bankrolling the smart grid — things that its critics say would not thrive unless government tilted the playing field. In other words, capital would not go there. It was all part of the trillion dollar stimulus package enacted in 2009.

For its part, the utility world has benefited greatly from that stimulus. Nearly $90 billion in tax incentives, loan guarantees and government grants have been made available to it. Those are for weatherizing 600,000 homes and expanding renewable energy programs. The money — $4.5 billion — is also being used to build out the smart grid, which allows utilities and customers to work together to save energy and increase reliability.

“Our homes, businesses and factories account for more than 70 percent of the energy we consume, and we need to invest in energy efficiency in the residential, commercial, and industrial sectors to improve U.S. competitiveness, lower electricity bills, and protect our environment,” President Obama has said.

“Those improvements are not costless,” adds Jason Price, an economist with Industrial Economics. “But the shift to less carbon-intensive fuels and energy efficiency will have positive implications on employment and the broader economy.”

Whenever the pieces realign on the economic chessboard, things can get scary and change may become more iffy. That’s especially true in the energy world and specifically so with respect to the implementation of energy efficiency technologies. If they can pay off, though, their use will become more compelling, enabling more commercial enterprises to benefit.

Ken Silverstein is editor-in-chief of Business Sector Media, publisher of Environmental Leader and Energy Manager Today.

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