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ACEEE analysis of ACES EE or Energy Efficiency Makes CENTS (LOTS OF CENTS!!!!)

June 9th, 2009 · 4 Comments

The energy efficiency sections of HR 2454, the Waxman-Markey American Clean Energy and Security (ACES) Act, are, almost certainly, its strongest elements. The United States, for a wide-ranging set of reasons, has evolved into a far more energy inefficient society than sensible (rather than stove-piped and distorted) economics would suggest should be the case. The American Council for an Energy-Efficient Economy (ACEEE) has just released its preliminary analysis of the impact that HR2454’s energy efficiency provisions would have on the economy and the average household. By 2020, the average American household will save approximately $750  and this increases to $3,900 by 2030.

“This analysis directly addresses any questions lawmakers may have about the huge impact energy efficiency can have on making cap-and-trade more affordable for Americans,” said Steven Nadel, Executive Director of ACEEE. “As members of Congress continue their consideration of energy and climate policy, they must realize that the energy efficiency provisions in these bills will save Americans money on their energy bills and create much needed jobs.”

This is good news … but also points to the need to make the good better.  We’re talking about $75 per year in average savings through the first decade, with the lion’s share of savings not coming until the end of the analysis period.  This makes sense (replacing appliances, more efficient new buildings, etc …) but we can do better, far better, with real opportunities for saving more money while cutting energy use and emissions even further.

While ACEEE finds that HR2454, as it came out of the Energy and Commerce Committee, would cost-effectively cut carbon emissions through energy efficiency, their work highlights how even more aggressive energy efficiency provisions could save even more money while cutting carbon emissions even further.

ACEEE has two top priorities:

Savings from the bill could be much improved by strengthening the Combined Efficiency and Renewable Electricity Standard, to require utilities to reduce electricity demand by 10 percent by 2020. As it stands now, the bill allows for 5 percent of electricity reductions to come from efficiency measures, with an option for governors to petition that up to 8 percent of the reductions come from efficiency in a given state. As baseline, business-as-usual projections for efficiency savings are close to 5 percent of nationwide electricity sales in 2020, the savings generated from a 10 percent requirement would have a more significant impact on our economy. An improved electricity standard would result in an extra $50 billion in cumulative consumer savings by 2030—potential savings that H.R. 2454 is leaving on the table.

H.R. 2454 also provides for a number of free emissions allowances to help companies mitigate the economic impact of climate change legislation, including substantial free allowances to electric utilities. These range from 43.75 percent of allowances in 2012, decreasing incrementally to 7 percent in 2029. If one-third of these funds were dedicated to efficiency, American consumers would save over 2.5 quads of energy in 2030. Cumulative energy bill savings will total more than $250 billion by 2030, over and above the savings from the Combined Efficiency and Renewable Electricity Standard.

As it stands now, ACEEE sees HR2454’s EE provisions as cutting US energy use by about 4 percent against business as usual projections for 2020.

These energy efficiency savings are more than the annual energy use of 47 of the 50 states, including New York State. Moreover, such savings will avoid about 293 million metric tons of carbon dioxide emissions in 2020, the equivalent of taking 49 million cars off the road for a year. By 2030, these energy efficiency savings grow to 11 quadrillion Btu’s, accounting for about 10 percent of projected U.S. energy use that year. Increasing the energy efficiency component of the Combined Efficiency and Renewable Energy Standard to 10% savings by 2020 and devoting one-third of electric utility allowances to efficiency would increase these 2030 energy savings by about 25 percent.

The opportunities are quite real, staring us in the face, and they are not just real — but they are cost effective, even profitable.

And, even with strengthening, there are many worthwhile energy efficiency elements that will be left on the table.

Although these potential savings are dramatic, there are many additional cost-effective efficiency opportunities available. ACEEE’s studies of energy efficiency’s potential indicate that current technologies can cost-effectively save 25-30 percent of total energy use, and that new technologies could increase the available cost-effective savings.

In other words, our near term (next 15-20 years or so) of global warming targets could be met simply through serious energy efficiency measures that would strengthen the economy. Serious deployment of renewable energy combined with this and we have the real potential, if we chose to take the opportunity, to meet scientific recommendations as to carbon reductions and start the United States seriously down a path toward a prosperous, climate-friendly future.

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Tags: cap and trade · Energy · energy efficiency

4 responses so far ↓

  • 1 Apartment Building Associations Seek Inefficient Buildings? // Jun 9, 2009 at 9:05 pm

    […] ← ACEEE analysis of ACES EE or Energy Efficiency Makes CENTS (LOTS OF CENTS!!!!) […]

  • 2 Terrence Murray // Jun 29, 2009 at 2:10 pm

    The energy efficiency portion seems like the most important portion of ACES, but one that’s not often talked about. It could be the provision that at the end of the day could really have the most lasting impact…

  • 3 CLF Scoop» Blog Archive » And Sarah Palin is even more wrong . . . Cap and Trade can be “Auction and Invest” // Jul 15, 2009 at 10:49 am

    […] the cost of the program for an average household at between $111 and $175 per year by 2030.  Independent analysis of the bill shows that even modest gains in energy efficiency, like those that can be financed by allowance […]

  • 4 Funding our Future // Aug 19, 2009 at 6:19 pm

    […] ClimateProgress (analysis of long-term benefit for businesses who invest in energy efficiency), or Get Energy Smart (analysis of Energy efficiency measures in the American Clean Energy and Security […]