Energy efficiency saves energy and money and helps reduce greenhouse gas emissions. Studies show that large energy efficiency opportunities are available in all states, with estimates of 20–30% savings or more from installation of cost-effective efficiency measures. Furthermore, new conventional fossil fuel power plants generate electricity at a rate between 7 and 13 cents per kilowatt-hour. At a cost of 2.5 cents per kilowatt-hour saved, efficiency improvements are significantly less expensive than building new plants, new power lines, and burning more greenhouse gas-emitting fossil fuel.[i]
An Energy Efficiency Resource Standard (EERS) is a mechanism that encourages more efficient use of electricity and natural gas. A federal EERS would set a national goal for energy savings, requiring explicit reductions in energy consumption for retail electricity and natural gas distributors for a specific period, such as from 2011 through 2020. Implementation opportunities range from end-use efficiency improvements, such as high efficiency lighting and appliances, to combined heat and power (CHP) systems and distribution system improvements.
Implementing a national EERS would commit every state to utilizing this least-cost resource and establish a baseline level of cost-effective and achievable energy savings. A number of states have already achieved significant savings under an EERS. For example, Vermont has saved about 9% of annual electricity sales as a result of efficiency measures installed from 2000–2008, more than 2% of which was achieved in 2008 alone.
ACEEE estimates that by 2020, a federal EERS with 10% electricity savings would reduce peak electric demand by almost 57,000 megawatts[ii] — equivalent to over 190 power plants that each has a capacity of 300 megawatts. Carbon dioxide emissions reductions would total approximately 129 million metric tons in 2020—equivalent to taking 21.5 million automobiles off the road (for a year), and creating 150,000 net jobs. Furthermore, utility customers would save a net $78.8 billion, with the proposed EERS producing a benefit-to-cost ratio of about 2:1.
For More Information:
[i] Lazard. June 2008. Levelized Cost of Energy Analysis — Version 2.0: http://www.narucmeetings.org/Presentations/2008%20EMP%20 Levelized%20Cost%20of%20Energy%20-%20Master%20June%202008%20(2).pdf