For decades, utilities have implemented successful programs to promote more efficient electric appliances and devices and their more efficient use. According to EPRI Technical Executive Chris Holmes, energy efficiency programs yielded a 3.9% reduction in U.S. electricity consumption between 2013 and 2018.
While these impressive results may lead some to de-emphasize the need for further gains, an EPRI study on energy efficiency potential finds otherwise.
“These initiatives have been extremely successful—so successful that there is a growing belief that the well of remaining efficiency potential has dried up,” said EPRI Technical Executive Chris Holmes. “Although most of energy efficiency’s ‘low-hanging fruit’ has been harvested, our study reveals that there is still plenty of fruit. We just have to extend our reach a bit higher.”
Researchers examined the remaining efficiency potential of numerous electric devices in the residential, commercial, and industrial sectors in the United States, gathering data on:
- The number of utility customers deploying the devices
- The most efficient commercially available technologies and their cost-effectiveness
- Market barriers to adoption (such as high upfront costs and lack of consumer awareness)
EPRI found that energy efficiency programs can reduce annual electricity use in 2040 by 365 terawatt-hours. For reference, the U.S. Energy Information Administration (EIA) reported that California retail electricity sales in 2017 totaled 257 terawatt-hours.
In 2018, EIA forecast that total U.S. electricity consumption would increase from 3,683 terawatt-hours in 2017 to 4,272 terawatt-hours in 2040 for an average annual growth rate of 0.62%. EPRI’s estimate of energy efficiency potential translates into a 10.2% reduction in electricity consumption over the next 23 years—and a 26% reduction in the annual growth rate to 0.45%.
The areas with the biggest efficiency potential were:
- Residential central air conditioning
- Electronics in commercial facilities, such as printers, copiers, phones, and networking equipment
- Industrial facilities’ HVAC, water heating, and lighting
The greatest U.S. potential is in the Southeast and South Central regions, driven by residential space cooling. In other regions, commercial facilities offer the most potential.
“The technologies where we see the greatest potential in the residential, commercial, and industrial sectors are air conditioning systems, heat pumps, and water heaters that use variable-speed compressors,” said Holmes. “These technologies are engineered to run at the optimal speed to meet comfort needs while minimizing energy consumption.”
Implications for Power Companies
The conclusion that there is still significant efficiency potential is supported by a 2015 EIA survey, which found that only 7.5% of homes have conducted audits to identify energy efficiency opportunities.
“The potential energy savings for the 92.5% of homeowners who have not had an energy audit is huge,” Holmes said.
Holmes points to several ways that utilities can reach beyond energy efficiency’s low-hanging fruit.
“They can address the barriers that prevent consumers from deploying these technologies,” he said. “This can include financial incentives and education.”
Utilities can develop tools for evaluating advanced metering data and identifying inefficiencies in their customers’ energy use.
“Utility customers can use these tools to examine the performance of their devices and pinpoint the reasons for high utility bills,” said Holmes. “Such tools could recommend more efficient technologies.”
Emerging technologies can help find efficiency potential. Customers can deploy smart sensors that track consumption of individual appliances and adjust their operation to optimize efficiency. EPRI and power companies are field-testing the energy management circuit breaker in residential and commercial service panels and are evaluating its performance in continuously monitoring specific appliances’ power consumption.
“Utilities can work with HVAC and appliance manufacturers, wholesalers, installers, and other stakeholders to make the process of deploying new technologies easier for consumers,” said Holmes.
The Question of Avoided Costs
For decades, utilities had a strong economic incentive to pursue energy efficiency programs because they reduced the capital and operational costs of generating, transmitting, and delivering electricity. These “avoided costs” have diminished in recent years with the wider use of low-cost natural-gas-powered electricity, rooftop solar, and wind power. This has shifted the threshold for justifying efficiency investments.
“It’s unclear whether these avoided costs will continue to decline,” said Holmes. “Cheap natural gas may not be available forever, and we could see greater avoided costs in the future. That would make efficiency investments more cost-effective.”
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Artwork by David Foster Graphics