EPRI, EEI Analysis: Utility-Based Energy Efficiency Programs Could Cut Energy Consumption 7-11%

May 5, 2008 // Published as a news service by IHS

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Energy efficiency improvements in the U.S. electric power sector could reduce electric consumption by 7-11% more than currently projected over the next two decades if key barriers are addressed, according to a preliminary analysis of potential energy savings released by Electric Power Research Institute (EPRI) and Edison Electric Institute (EEI).

Steps that need to be taken to increase energy efficiency are:

• Increased consumer education.
• Adoption and enforcement of aggressive building codes and appliance standards.
• Creation of utility business models that promote increased efficiency within the power sector.
• Adoption of electricity pricing policies that more accurately reflect the cost of providing electricity to consumers and give consumers the information they need to use it wisely.

The analysis comes at a time when utilities, regulators and policymakers are aggressively seeking ways to meet growing electricity demand, while reducing the carbon footprint of the U.S. economy, said EPRI. The key challenge is to maximize potential gains in energy efficiency, while ensuring adequate new electric generation to maintain reliability and meet future demand.

The draft findings were presented by EPRI and EEI during an Edison Foundation conference which examined strategies to meet the growing demand for electricity; a demand expected to soar 30% by 2030, according to the U.S. Energy Information Administration (EIA).

That demand growth projection would be even higher without the implementation of existing building codes, appliance standards and market-driven consumer incentives, which will shave electricity consumption by 23%, found the EPRI-EEI study. However, additional efficiency gains could be achieved only by overcoming major market, regulatory and consumer barriers, the analysis found.

"This study demonstrates the potential of energy efficiency to offset some of the projected need for new electric generation as cutting-edge technologies become available and are adopted," said Dr. Michael Howard, senior vice president at EPRI. "We think a 7% efficiency improvement is realistic - and gains of 11% or more are technologically feasible - depending on the degree to which various obstacles can be overcome."

"Achieving efficiency improvements going significantly beyond those already in the pipeline will be a major undertaking," said Diane Munns, executive director at EEI. "No matter how you slice it, we'll have to build significant new generation to ensure that we meet demand. The greater gains we make in energy efficiency, the better off everyone will be, because we'll have more cost-effective options for serving our customers," she said. "But if we overestimate what can be accomplished, we could find ourselves without an adequate supply of electricity to meet consumer needs."

EPRI programs and collaborations that evaluate cutting-edge technologies have identified numerous opportunities to markedly improve energy efficiency through use of "smart" and highly efficient electrical devices, said EPRI. Direct energy feedback devices, such as household thermostats that respond automatically to electricity price or demand signals, can cut energy use and save customers money.

Consumers' ever-increasing appetite for electricity-hungry devices - even with continuing efficiency improvements - will keep electricity demand on a steady upward trajectory. While many large household appliances have become more efficient over the years, many smaller devices have not, said EPRI. Two 30-watt set-top television boxes, for example, may consume as much electricity as a large refrigerator.

"While electricity rates will rise due to increasing across-the-board costs of producing electricity, energy efficiency improvements can help reduce some of these costs to consumers," Munns said. "To maximize utility investment in efficiency programs, energy efficiency must be treated as an energy resource on par with new generation."

Copies of the EPRI-EEI presentation are available on the Edison Foundation web site.

Source: Electric Power Research Institute (EPRI).