Energy efficiency will play a “crucial role" in decarbonizing the power system, even as lower-cost renewables make up a greater portion of U.S. generation and in scenarios where lower levels of building electrification keep electricity prices depressed, according to a report from the American Council for an Energy-Efficient Economy.
The U.S. currently generates about 20% of its electricity from renewable resources, and the U.S. Energy Information Administration expects that figure to double by 2050 even without additional policy support for wind and solar, said Mike Specian, a research manager within ACEEE’s state and utility policy program and lead author of the report.
“A major driver of that growth is cost,” he said in a June 21 webinar on the report's findings. “So that raises an important question .... what role, if any, should energy efficiency play in a high-renewable energy future?”
ACEEE examined five grid regions in the U.S. — California, Texas, the Pacific Northwest, the Southeast, and the Midwest — and concluded energy efficiency could reduce customer costs to the tune of $10 billion-$19 billion annually per region by 2050. Savings come from avoided energy use, generation capacity and transmission costs.
The research modeled the effect of 12 individual energy efficiency measures and packages and found that those affecting thermal space conditioning loads “are likely to have the greatest impact on both energy savings and avoided electricity system costs through 2050.”
Modeled efficiency measures include building envelope improvements, a reduction in plug loads, and the use of more efficient heat pumps, water heaters and clothes dryers.
There is variability among regions, however, and savings will be larger in regions “with lower baseline building energy codes, lower quality existing building stock, and more extreme temperatures, such as Texas and the Southeast," the report found.
However, the research shows consistently that energy efficiency “provides more value, the more quickly electricity generation decarbonizes,” said Specian. “It does this by offsetting the escalating costs of things like fossil-based energy and carbon capture under high renewable energy scenarios.”
The research also showed that, when considering a scenario where power sector emissions drop 95% below 2005 levels by 2050, commercial efficiency measures tend to deliver greater energy savings sooner, though they are ultimately surpassed by residential energy savings in most regions.
In every region ACEEE studied, commercial savings are greater than residential savings in 2030. And in all regions except California, residential savings are greater than commercial savings in 2050.
“This has to do with a number of factors including the rates of new building construction and the rates of building equipment replacement,” Specian said. “But what it shows is that there is more near-term savings potential in the commercial sector, and more long-term savings potential in the residential sector.”
Clarification: We have updated this story to clarify the range of potential cost savings from energy efficiency for customers in 5 U.S. grid regions.
