Building the Efficiency “Farm”Jeff Perkins for Zondits, June 25, 2014
Have you noticed the energy efficiency farm that you likely drive by every day? The answer is simple: you have never seen it, yet if you live in one of the 26 states that exploit energy efficiency as a resource, you are surrounded by those “farms” wherever you go. By promoting the installation of energy-efficient equipment, these states “build” the efficiency farm — also called the virtual power plant — every day.
While energy efficiency has been embraced with tremendous success by some of the biggest states for nearly 40 years, it has always faced an uphill battle. The fact that only 26 US states have embraced it at any level, and that only a dozen or so have done so with great gusto, is somewhat indicative of the headwinds efficiency has faced. Efficiency has forever been saddled with the image of sacrifice and is constantly fending off an ill-informed “Drill, baby, drill” crowd. Quite frankly, from the efficiency perspective you can sacrifice and drill all you want to, but energy efficiency means that you really do not need to do as much of either of them.
Beyond the fundamental market failures related to mismatched motivations and undervalued externalities, I would like to suggest that part of the problem is that the work of 40 years is simply not visible. Even from a data side of things, in a business dominated by a supply and generation mindset, there is abundant data on how much energy we generate. You can also find plenty of data on how much we consume. And yes, if you look hard enough you can find data on how much we have saved. But rarely is all of that shown together in the same place.
Power plants are physical and real – we see those. Renewables are all the rage, and those too we can see. In places as diverse as Arizona, California and New Jersey you will see solar farms covering green fields, brown fields, and parking lots. Across the high plains and mountainous western US wind “farms” of immense scale are plentiful. And, even from 36,000 feet the heavy footprints of natural gas drilling farms are plainly visible.So, what about the efficiency farm? The good (and bad) is that the efficiency farms we are building are not visible! In fact, they will never pollute the air, or water, they will not encumber your view or threaten any species living on the planet. Moreoever, with the possible exception of certain industry lobbyists, no one has ever protested having an efficiency farm in their backyard.Through energy efficiency programs offered by electric and gas utilities across the US, and through codes and standards developed by some of those same programs and codified by the DOE and other regulatory bodies, efficiency has been and continues to be an enormous resource on par with any generation source we have. In fact, when you sum up all of the efficiency farms built over the past 40 years, they exceed the total capacity of all of the hydroelectric generation in the entire United States! I did that math not too long ago and it opened my eyes.As impressive as the total over 40 years may be, I wanted to see what happened in just one year. Working with data for 2011 (from EIA, Edison Foundation, LBNL, ACEEE) which was the most recent efficiency data available, I graphed all of the new generation sources added in that year and then added in the capacity that was effectively avoided because of the efficiency that was harvested. The graph below is what the “new capacity additions” data would look like. The green slices are the ones that represent the efficiency that was harvested in that year.
The light green represents efficiency harvested by utility EE programs and the darker green represents efficiency delivered by energy codes and appliance standards. Together they are the largest piece of new “supply” delivered that year. And despite ill-advised moves by states like Indiana and Ohio, those green slices are getting larger and larger each year.
To be perfect clear, I am not suggesting efficiency will do it all. We need to continue to develop clean and low carbon generation. However, efficiency IS a resource – it is the lowest cost – and it is abundant. We should be doing everything possible to harvest at least everything economically viable and perhaps even all that is technically viable.