The growth of clean, low-cost renewable energy resources like wind and solar are transforming the U.S. electric grid. This report investigates the crucial role that energy efficiency will play in decarbonizing the electricity system and paving the way for a high renewable energy future. First, we review prominent reports that lay out feasible pathways to achieve either a high renewable energy or deep decarbonization future, and closely examine the role energy efficiency plays within them. Second, we model and analyze energy efficiency at a granular level, exploring which specific residential and commercial energy efficiency measures or packages are most effective at avoiding energy, generation capacity, and transmission costs in 2030 and 2050. Within the five grid regions we studied (California, Texas, Pacific Northwest, Southeast, Midwest), we estimate that by 2050 energy efficiency avoids electric grid costs that would otherwise be passed on to customers by $10–$19 billion annually. We also find that energy efficiency provides more value the more quickly electricity generation decarbonizes by offsetting the escalating costs of fossil-based energy and carbon capture, with measures that affect thermal space conditioning loads (i.e., heating and cooling) having the greatest impact.
This report was revised on June 30, 2023, to correct references. These changes did not affect any findings in the report.