Efficiency, the alternative Alternative

Earlier we wrote about the superior returns on investment efficiency plays offer when measuring reduced energy and emissions per dollar spent. Today we tackle the question- what does a region do that is renewable energy resource poor? What if there are no windy areas? When solar, biomass, geothermal and nuclear play a limited role- how do we lessen emissions, energy use and the need for additional power plants? The answer is not a surprise- reduce wasted energy.

A recent report by both Duke and Georgia Tech Universities gives further support to the argument that focusing efforts on efficiency can have a more dramatic effect than other methods, and can do so in areas where renewables are not competitive or available. The SouthEastern US is a perfect place to focus- an area that has virtually no wind resources.

Here are the highlights from the report:

  • In 2020, energy bills in the South would be reduced by $41 billion, electricity rate increases would be moderated, 380,000 new jobs would be created, and the region’s economy would grow by $1.23 billion. (regional GDP)
  • The cost/benefit ratios for the modeled policies range from 4.6 to 0.3, with only two showing costs greater than benefits. When the value of saved CO2 is included, only one policy is not cost effective
  • The initiatives would involve actions at multiple levels (state and local, national, utility, business, and personal). In the absence of such initiatives, energy consumption in these three sectors is forecast to grow by approximately 16% between 2010 and 2030.
  • The nine illustrative policies show the ability to retire almost 25 GW of older power plants and also avoid over the next twenty years the need to construct 49 GW of new plants to meet a growing electricity demand.
  • 8.6 billion gallons of freshwater could be conserved in 2020 (56% of projected growth in cooling water needs) and in 2030 this could grow to 20.1 billion gallons of conserved water (or 45% of projected growth).

Investments of $31.5B over the 20 years (to 2030) would generate a savings of $126B (4.0x ROI.) Clearly this is a net positive investment for any region and returns numbers that most renewables currently can not beat. The nine suggested policies include: increased appliance standards, weatherization of buildings, retrofit incentives, enhanced building codes and more (see page 15 of study.) Increasing appliance standards has the best ROI at 4.6x and all of the policies together have a 3.4x ROI.

Energy Use with & without efficiency (Duke/ Ga. Tech Report)

The South consumes 43% of the nation’s electric power, 40% of the energy consumed in residences, and 38% of the energy used in commercial buildings, says the study- thus a successful efficiency policy would have a major impact on both the US as well as any other renewable resource region in the world.

One would expect resistance for any political measures that mandate clean energy requirements from areas that are not fortunate enough to have the natural resources to comply. Accounting for improved efficiency standards in commercial and residential homes is a worthy compromise that achieves the same goals as clean energy and does so, at times, at a more economical rate. Because the numbers speak for themselves, it likely is a good idea for the capital and policies to follow.