Real Prospects for Energy Efficiency in the United States (2010) / Chapter Skim
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5 Overarching Findings and Lessons Learned from Federal and State Energy Efficiency Policies and Programs
5 Overarching Findings and Lessons Learned from Federal and State Energy Efficiency Policies and Programs
Pages 261-296
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transportation sector, and U.S. industrial manufacturing are summarized here in Table 5.1, which presents the panel's conservative and optimistic estimates for cost-effective annual energy savings available in these three sectors in 2020 and 2030.1 The panel's estimates are not projections; they reflect its assessments of technology potential assuming a rapid rate of deployment, but a rate nonetheless consistent with past deployment rates.
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5.1 OVERARCHING FINDINGS On the basis of its estimates of the energy savings potential outlined in Table 5.1, the panel presents the following overarching finding: Overarching Finding 1 Energy-efficient technologies for residences and commercial buildings, trans portation, and industry exist today, or are expected to be developed in the normal course of business, that could potentially save 30 percent of the energy used in the U.S. economy while also saving money.
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electricity generation capacity. Since the estimated electricity savings in buildings from Table 5.1 exceeds the EIA forecast for new net electricity generation in 2030, implementing these efficiency measures would mean that no new generation would be required except to address regional supply imbalances, replace obsolete generation assets, or substitute more environmentally benign generation sources.
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5.2 ENERGY EFFICIENCY POLICIES AND PROGRAMS Between 1975 and 1980 the federal government adopted a number of laws that established educational efforts and financial incentives for energy efficiency, and it authorized the setting of efficiency standards. More recent legislation has estab lished minimum efficiency standards for a wide range of household appliances and equipment used in the commercial and industrial sectors, as well as tax incentives to stimulate the commercialization and adoption of highly efficient products and buildings.
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. The original CAFE standards for cars reached their maximum level in 1985; small increases in the standards for light trucks have been adopted since then.5 With no further increase in standards, the average fuel economy of each type of vehicle (cars and light trucks)
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. 5.2.2 Appliance Efficiency Standards Appliance efficiency standards were first enacted by states -- including California, New York, Massachusetts, and Florida -- during the late 1970s and early 1980s (Nadel, 2002)
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In 1992, minimum efficiency standards were extended to motors, heating and cooling equipment used in commercial buildings, and some types of lighting products. In 2005, standards were adopted for a variety of "second-tier" products, including torchiere light fixtures, commercial clothes washers, exit signs, distribution transformers, ice makers, and traffic signals.
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These delays have reduced the energy savings and economic benefits of appliance efficiency standards. Additional appliance efficiency standards were included in EISA.
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It is estimated that the influence of building energy codes on new homes and commercial buildings constructed during the 1990s reduced U.S. energy use by 0.54 quad in 2000 (Nadel, 2004)
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and the private sector, • Focus on multiple technologies and designs, • Contribute to all stages of the innovation and product development process, and • Are complemented by other policies, such as financial incentives or regulations that stimulate market demand. In contrast to the building technology program, DOE's transportation tech nology RD&D program has had very little effect on the vehicle marketplace.
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Based in part on this experience, new tax credits were enacted in 2005 for innovative energy efficiency measures that included hybrid, fuel cell, and advanced diesel vehicles; highly efficient new homes and commercial buildings; and efficient appliances. These tax credits were intended to support the commercialization and market development of these innovative technologies but not necessarily to save a significant amount of energy.
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In a few states, these programs are implemented by independent entities or state agencies rather than by utilities. Utility and state efficiency programs provide information, technical assis tance, and financial incentives to end users in order to encourage their greater adoption of cost-effective energy efficiency measures.
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Other states including Hawaii, Nevada, and North Carolina allow utilities to count the energy savings from efficiency programs as well as renewable energy generation toward meeting overall clean-energy standards (Nadel, 2007)
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Furthermore, energy savings have risen since 2004 because overall DSM funding has increased. National energy savings reached approximately 90 TWh as of 2006.
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. Given that over 85 percent of the CHP capacity in the country was installed after 1980, the panel attributes 1.62 quads of energy savings in 2006 to PURPA and other policy initiatives aimed at stimulating the adoption of CHP systems.
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Year Source NRC, 2002a CAFE vehicle efficiency standards -- 4.80 2006 Nadel et al., 2006b Appliance efficiency standards 196 2.58 2006 Shipley et al., 2008c PURPA and other CHP initiatives -- 1.62 2006 ENERGY STAR® labeling and promotion EPA, 2007bd 132 1.52 2006 Nadel, 2004e Building energy codes -- 1.08 2006 York and Kushler, 2006f Utility and state end-use efficiency programs 90 1.06 2006 DOE, 2007b DOE industrial efficiency programs -- 0.40 2005 DOE, 2006g Weatherization assistance program -- 0.14 2006 FEMP, 2006h Federal energy management program -- 0.11 2005 Total -- 13.32 -- -- aExtrapolation of fuel savings estimated by the NRC to 2006, and assuming 75 percent of the energy savings from vehicle efficiency improvements are due to the CAFE standards. bInterpolates between savings estimates by ACEEE for 2000 and 2010.
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These programs promote energy efficiency improvements in motors and in pumping and compressor systems. They also provide energy assessments for larger industrial plants and conduct energy audits for small- and medium-size manufacturers through university-based Industrial Assessment Cen ters.
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A comparison of the energy savings across the various policies and programs in Table 5.2 shows that regulatory initiatives such as the CAFE standards, appli ance efficiency standards, and PURPA provided the largest amount of energy sav ings. It should be recognized that some energy efficiency policy initiatives, such as RD&D efforts in the buildings sector, are not included in Table 5.2 in order to avoid double counting of savings.
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California began setting its building and appliance efficiency standards earlier, and its electricity prices increased more rapidly, than was the case in most of the United States. And, of course, compared with the entire United States, other factors such as a different mix of industries and differences in climate also contrib uted (Sudarshan and Sweeney, 2008)
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Both New York and California have high-priced electricity and below-average per capita consumption, as indicated in Figure 5.4, and both have a relatively low percentage of total consumption associated with the industrial sector -- New York just 11 percent and California only 19 percent, compared to the national average of 29 percent. Regarding policies that influenced the trend shown in Figure 5.3, Califor nia first enacted efficiency standards for major types of appliances and for new residential and commercial buildings in the mid-1970s.
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The national energy savings are substan tial, as noted previously. In addition to appliance standards and energy codes for new buildings, Cali fornia has implemented substantial state and utility energy efficiency programs.
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Note: IRP = integrated resource planning; "crisis" refers to the temporary power short ages and severe electricity price spikes experienced in 2001. Source: Rosenfeld and EIA Baseline 2008.
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The combination of standards and programs has resulted in considerable electricity savings since the inception of these efforts. Figure 5.7 illustrates the cumulative effects of appliance standards, building energy codes, utility efficiency programs, and what is termed market transformation -- that is, longer-term market impacts due to previous state and utility efficiency programs -- in California from 1975 though 2003.
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negative net benefits (cost Penalty effectiveness guarantee) Earnings = ER x PEB FIGURE 5.6 Utility energy efficiency incentive mechanism adopted by the California Public Utilities Commission (CPUC)
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Although the past three decades have been characterized by increases in population, greater demands for energy-using technologies, and increasing life style expectations, New York State has maintained a relatively flat level of total energy use per capita (about 36 percent lower than the national average in 2005)
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. New York's energy efficiency efforts began in the late 1970s with federal funding for a State Energy Conservation Program (SECP)
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With the transition to wholesale market competition, the responsibilities for administering DSM programs were transferred to the New York State Energy Research and Development Authority (NYSERDA)
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and achievements, 1990−2007. Note: EE = energy efficiency; GWh = gigawatt-hours; LIPA = Long Island Power Authority; NYPA = New York Power Authority; NYSERDA = New York State Energy Research and Development Authority.
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. 5.5 LESSONS LEARNED What lessons can be drawn from the wide-ranging experience encapsulated in this chapter regarding policies and programs aimed at increasing energy efficiency at
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The experience shows that minimum efficiency standards can be a very effec tive strategy for stimulating energy efficiency improvements on a large scale, espe cially if standards are updated periodically. Minimum efficiency standards have been a key part of both federal and state energy efficiency efforts.
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This combination of actions has led to dramatic improvements in the efficiency of refrigerators and other types of appliances, and the efficiency gains and energy savings are continuing today. The experience described above suggests that energy efficiency policies should be kept in place for a decade or more in order to ensure an orderly development of energy efficiency markets.
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U.S. Energy-Efficiency ProgramsA $2.6 Billion Industry.
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Industrial Technologies Program: Summary of Program Results for CY 2005. Washington, D.C.: DOE Office of Energy Efficiency and Renewable Energy, Industrial Technologies Program.
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2002. Appliance and equipment efficiency standards.
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Washington, D.C.: The National Academies Press. NYSERDA (New York State Energy Research and Development Authority)
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In Proceedings of the 2006 ACEEE Summer Study on Energy Efficiency in Buildings. Panel 8, Number 24.
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