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Studies suggest that past rates of energy efficiency improvement can be sustained

September 8, 2016

Can efficiency improvements achieved in past decades be sustained in the future?  How much impact does the rebound effect have on energy efficiency potential out to 2030, or even 2050? To answer these questions, I was invited to write a paper entitled The Potential for Additional Energy Efficiency Savings Including How the Rebound Effect Could Affect This Potential. The paper appears in the current issue of Current Sustainable/Renewable Energy Report (September 2016), an academic journal published by Springer. A PDF of the paper can be accessed here.

Energy savings potential past and future

The paper discusses energy efficiency achievements in several countries over the past several decades and finds that energy efficiency improvements have reduced energy use by 0.6-2.0 % per year, varying by country and period studied. The paper then reviews a variety of recent studies that estimate how much energy efficiency potential remains, looking at studies that estimate efficiency potential out to at least 2030 and, in multiple cases, out to 2050.

Based on this analysis, as well as past accomplishments, I find that compound energy efficiency savings of 1.0–1.4% per year appear to be feasible, and savings of 2.0–2.6% per year might be possible, but have been infrequently demonstrated in practice. By and large, these estimates of potential future savings do not include rebound effects, although estimates of past efficiency improvements do generally include rebound effects.

How rebound effects savings estimates

The paper summarizes a variety of studies that look at direct and indirect rebound effects. (Direct rebound is the impact of a purchase of an efficient product on the purchaser’s use of that product; indirect rebound reflects upstream impacts such as the impact of re-spending money saved on energy bills.) From this review, I find that direct and indirect rebound effects are generally each in the range of 10–20% of savings; therefore total rebound typically is in the 20–30% range.

Putting it all together—how much future savings are possible?

If we reduce the estimates of future energy efficiency potential to account for direct and indirect rebound, at a minimum it appears that recent rates of energy efficiency improvement can be sustained for many years. Some studies suggest that even higher rates of energy efficiency improvement might be achieved, but for the most part, these levels of savings have not yet been achieved in practice.  Still, given objectives of fostering economic growth and reducing emissions of greenhouse gases, striving to take efficiency improvements to a new level is a worthy objective.

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Energy Efficiency as a Resource  Research and Development (R&D) Utility Business Models
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