Energy efficiency can be an attractive way for states to meet the plan’s targets because, in addition to being relatively inexpensive to deploy on its own, energy efficiency reduces the need to build new, costly power plants in the future.
C2ES examined six economic modeling studies that project the likely impacts of the Clean Power Plan on the U.S. power mix and electricity prices. Despite starting with different assumptions, all of the studies project that energy efficiency will be the most used and least-cost option for states to implement the plan, and that overall electricity consumption will decline as a result.
The majority of the studies project either cost savings to power users under the Clean Power Plan or increases of less than $10 billion a year. That translates to less than $87 a year per household, or about 25 cents a day.
|C2ES President Bob Perciasepe moderates a Solutions Forum panel with (l to r): Steve Harper, Global Director, Environment and Energy Policy, Intel Corporation; Alyssa Caddle, Principle Program Manager, Office of Sustainability, EMC; and Lars Kvale, Head of Business Development, APX Environmental Markets.|
Our second Solutions Forum focused on how to spur more energy efficiency, especially through “intelligent efficiency” — a systems-based approach to energy management enabled through networked devices and sensors.
Energy and technology experts from leading companies like PSEG, EMC, Intel, and Nest and leaders of premier city and state energy efficiency programs in Illinois, Minnesota and Philadelphia agreed there is plenty of room for improving efficiency in how we produce, transmit and consume electricity. The technologies already exist and cities and states are already taking action to cut U.S. energy use and emissions while increasing reliability.
Twenty-one states have established mandatory energy savings targets through an energy efficiency resource standard, and five other states have a non-mandatory energy savings goal. But as Lars Kvale, head of business development for APX Environmental Markets, noted, no two states have the same energy efficiency program. Programs differ in how they are implemented, how they measure and verify energy savings, and whether they have a tradable market.
States without existing programs can still harness the benefits of energy efficiency in implementing the Clean Power Plan without having to reinvent the wheel. States can share measurement and verification protocols without having to create their own. In addition, energy efficiency groups, state officials, and businesses are developing new protocols to quantify the impacts of intelligent efficiency.
Another strategy for spurring more efficiency discussed at our forum is being smarter about communicating the benefits. Saving energy and money are great, but most people don’t know how many kilowatts they use in a morning, or how much that costs. Intelligent efficiency can deliver more control, convenience, and comfort to consumers. That’s what Nest’s Rick Counihan and Philadelphia Director of Sustainability Katherine Gajewski said really sparks consumers’ interest.
Ralph Izzo, President and CEO of New Jersey utility PSEG, also pointed out another tool for encouraging efficiency: a price on carbon emissions. Sending a clear market signal that producing climate-altering emissions has a cost would undeniably tilt the tables toward energy efficiency in ways that other measures could build upon. The models we reviewed certainly back up this sentiment.
As the country’s largest landlord, fleet operator, and purchaser of goods and services, the federal government can lead by example in moving the country toward a more sustainable future.
Taking that opportunity, the Obama Administration recently issued a new executive order, Planning for Federal Sustainability in the Next Decade, that builds on energy-saving advances and ups the targets for federal agencies to do even more. Joining in the commitment to cleaner energy and energy efficiency were 14 companies that are major federal suppliers.
A 2009 executive order set a target of reducing federal greenhouse gas emissions 28 percent below 2008 levels by 2020. The March 2015 executive order raises the bar – to 40 percent below 2008 levels by 2025. The goal is expected to save taxpayers up to $18 billion in avoided energy costs.
The order also directs federal agencies to:
- Increase the use of renewable energy sources to 30 percent of total consumption by 2025,
- Reduce per-mile greenhouse gas emissions from federal fleets 30 percent by 2025 and ensure a fifth of the fleet is made up of zero-emission and plug-in hybrid vehicles by 2025, and
- Reduce the amount of water used in federal buildings 20 percent below 2007 levels by 2025.
Complementing the new executive order, 14 large federal suppliers committed to new or expanded emission pledges that would cumulatively reduce their greenhouse gas emissions by 5 million metric tons by 2020. Several members of the C2ES Business Environmental Leadership Council made commitments:
- IBM will reduce its energy-related carbon dioxide emissions 35 percent below 2005 levels by 2020, and buy 20 percent of its power from renewable sources by that year.
- GE will invest $25 billion in research and development in energy efficiency and clean energy and reduce water use and greenhouse gas emissions by 20 percent below a 2011 baseline by 2020.
- HP will reduce the emissions intensity of its product portfolio 40 percent by 2020 from a 2010 baseline.
Taken together, the new executive order and the voluntary commitments from federal suppliers will reduce U.S. greenhouse gas emissions by 26 million metric tons below 2008 levels by 2025, according to White House estimates.
Figure: Fiscal Year 2013 Federal Government Direct Greenhouse Gas Emissions by Category
Federal direct greenhouse gas emissions totaled nearly 45 million metric tons of CO2e in Fiscal Year 2013. Over 60 percent of emissions are from purchased electricity. Transportation emissions include those from passenger fleet vehicle, vehicles, aircraft, ships, and related equipment.
Source: U.S. Department of Energy (2014), "Comprehensive Annual Energy Data and Sustainability Performance"
Federal agencies trying to meet tougher sustainability mandates can make significant progress toward their goals by taking advantage of more efficient data storage and other information and communication technologies.
At the NextGov Prime 2013 conference, Scott Renda of the White House Office of Management and Budget and I outlined some of the ways these technologies can lead toward a greener government that saves energy – and money.