Energy efficiency will play a key role in the Clean Power Plan

A new C2ES study outlines the significant role energy efficiency is expected to play in reducing carbon emissions from power plants under the proposed Clean Power Plan.

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.

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.