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Energy efficiency – The low-cost path to lower electricity bills

From Green Right Now Reports A new report by the American Council for an Energy Efficiency Economy shows that energy efficiency is the least costly way to lower state and...

From Green Right Now Reports

A new report  by the American Council for an Energy Efficiency Economy shows that energy efficiency is the least costly way to lower state and consumer electricity bills.

Comprehensive energy efficiency – it’s no surprise – costs less than adding any type of new power plant to the grid, as this chart illustrates:

Spending money on energy efficiency costs less than adding power plants.

Energy experts have long extolled the benefits of conservation, because the energy an individual doesn’t require any additional electricity, for the most part. Lowering energy consumption can  have upfront costs, however, both for the consumer and for city or power providers.

Consumers, for instance, may need to install additional insulation or a higher efficiency HVAC system to reduce their consumption. A city or power provider may have to spend on education or incentives to induce its users to reduce energy use. These are the efficiency costs the study compared with the price of adding new power generation.

The four lowest cost ways to add new electricity capacity were efficiency — which the report defined as everything from stricter building codes to consumer incentives — biomass, wind power and natural gas generation, the study found.

The least-polluting method of adding new electricity capacity also would be efficiency, followed by wind, which along with solar is typically rated as the cleanest of power sources.

On average, energy efficiency programs costs about 2.5 cents per kilowatt hour (kWh), according to the American Council for an Energy-Efficient Economy (ACEEE), which sponsored the report, Opportunity Knocks: Examining Low-Ranking States in the State Energy Efficiency Scorecard.

New generation plants, by contrast, cost 6 to 15 cents per kilowatt hour or more, according to the report.

In addition to looking at what works best to keep electricity use stable, the authors sought to find the reasons some states enact only a few energy conservation measures.

After interviewing 55 stakeholders — utility and state officials and consumer advocates — in the states ranking the lowest for energy conservation, they found that leaders in these states thought energy conservation programs were too expensive and ineffective.

In some instances, political philosophies stood in the way of more aggressive energy programs with respondents expressing “an overriding aversion to mandates and requirements.”

Those interviewed were from the states that ranked at the bottom of all US states for conservation programs in the annual ranking assembled by ACEEE: Alabama, Kansas, Mississippi, Missouri, North Dakota, Oklahoma, South Carolina, South Dakota, West Virginia and Wyoming.

Researchers also found that utilities in these states and others often saw consumer efficiency programs as nice-to-have for customers, but not as a “real utility resource.”

Some utility managers told the researchers that energy efficiency programs put upward pressure on rates because of their upfront costs, and that lower-income customers could not afford them anyway.

This view did not square with reality, according to the report’s authors, who found that energy efficiency programs drove energy costs down for all participants and improved electricity reliability by lowering peak demand. Furthermore, the authors found that electricity rates had risen faster between 2007-2010 in the states with the least number of conservation programs, suggesting that in the long term, failure to adopt conservation measures complicates efforts to keep a lid on electricity rates.

Another benefit of energy efficiency programs was that they reduced the use of fossil fuels (mainly coal burning), which had larger environmental effects, according to the report.

The report concluded that energy conservation programs were beginning to take hold in some of these bottom-ranking states, with the addition of stronger building codes (in Alabama and Oklahoma), though most still lack a comprehensive approach and are failing to “tap into the economic benefits of energy efficiency” unless they take a bolder approach.


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