New ACEEE Report Reveals Secret to Thriving Economy Through Long Term Energy Efficiency

A new report from the American Council for an Energy-Efficient Economy (ACEEE) says America is thinking too small when it comes to energy efficiency.  To make things worse, the ACEEE says that Americans are also making the mistake of concentrating on investing in risky and expensive bids to develop new energy sources, while risking the health of our economy by largely ignoring investments in energy savings and efficiencies.  According to the new ACEEE report, simply cutting energy use by 60% by 2050 could generate 2 million jobs and save the equivalent of $2600 per household each year.

The new report argues that it is time for the United States to grasp onto its long-term energy efficiency potential which will greatly benefit the flailing US economic recovery and future health of the economy.  Titled The Long-Term Energy Efficiency Potential:  What the Evidence Suggests, the new ACEEE report outlines three scenarios under which the U.S. could either continue on its current path or cut energy consumption by the year 2050 by almost 60 percent, add nearly two million net jobs in 2050, and save energy consumers as much as $400 billion per year.

According to the ACEEE, the secret to major economic gains from energy efficiency is a more productive investment pattern of increased investments in energy efficiency.  Theoretically, more energy efficiency investment would allow lower investments in power plants and other supply infrastructure.  The result would be a substantial lowering of overall energy expenditures on an economy-wide basis in the residential, commercial, industrial, transportation, and electric power sectors.

ACEEE Executive Director Steven Nadel said:  "Large-scale energy efficiency advances will require major investments. But the good news is that the investments will generate a significant return in the form of large energy bill savings. After paying for the program costs and making the necessary investments as we pay for them over time, the economy will benefit from a net energy bill savings that ranges from 12 to 16 trillion dollars cumulatively from 2012 through 2050. In other words, the energy efficiency scenarios outlined in our report will spur an annual net energy bill savings that might range up to about $2600 per household annually in constant 2009 dollars."

The ACEEE report gives examples of potential large-scale energy efficiency savings with scenarios like:

• Electric Power - Our current system of generating and delivering electricity to U.S. homes and businesses is just 31% energy efficient. To put it another way, for every three units of coal or other fuel we use to generate the power, we manage to deliver less than one unit of electricity to our homes and businesses. What the U.S. wastes in the generation of electricity is more than Japan needs to power its entire economy.  This current level of efficiency (or inefficiency as it may be) has basically been unchanged since 1960, when President Dwight D. Eisenhower spent his last year in the White House.
• Transportation - The ACEEE report sees a future where the fuel economy of conventional petroleum-fueled vehicles continues to grow while hybrid, electric, and fuel cell vehicles gain large shares, totaling nearly three-quarters of all new light-duty vehicles in 2050. By the way, this is in line with what I heard last week at Ford and I will post a video tomorrow.  Aviation, rail, and shipping energy use could decline substantially through a combination of technological and operational improvements. In the most aggressive scenario in the report, there is a shift toward more compact development patterns, and greater investment in alternative modes of travel and other measures that reduce both passenger and freight vehicle miles traveled. This scenario also phases out conventional light-duty gasoline vehicles entirely, increases hybrid and fuel cell penetration for heavy-duty vehicles, and reduces aviation energy use by 70 percent.  
• Buildings - In residential and commercial buildings the evidence suggests potential reductions of space heating and cooling needs as the result of building shell improvements of up to 60 percent in existing buildings, and 70-90 percent in new buildings. The ACEEE scenarios also incorporate advanced heating and cooling systems (e.g., gas and ground-source air conditioners and heat pumps and condensing furnaces and boilers), decreased energy distribution losses, advanced solid-state lighting, and significantly more efficient appliances.
• Industry - In the industrial sector, energy efficiency opportunities reduce 2050 energy use by up to half, coming less from equipment efficiency and more from optimization of complex systems. The ACEEE analysis focuses on process optimization, but also anticipates even greater optimization of entire supply chains in the most aggressive scenario, allowing for more efficient use of feedstocks and elimination of wasted production.

If you are asking yourself if these types of advances in energy efficiency are realistic in America, as the ACEEE report points out, the U.S. already has achieved considerable advances in the energy efficiency arena and is poised to do even more.

Since 1970,  the U.S. economy has tripled in size and three-quarters of the energy needed to fuel that growth has come from an amazing variety of advances in energy efficiency and NOT from new energy supplies.   Currently, the emphasis that is placed on uncovering new energy supplies, may be crowding out investments and innovations that can help to achieve greater levels of energy productivity.

The new ACEEE report argues that our current economic recovery and our future economic prosperity, will depend more on new energy efficiency behaviors and investments than we've seen in the last 40 years.

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Source: Press Conference 1-12-12,  The Long-Term Energy Efficiency Potential:  What the Evidence Suggests