Energy efficiency aids utilities in reliable electricity delivery

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Spending on customer-funded energy efficiency programs by electric and natural gas utilities is on the rise, according to research from Lawrence Berkeley National Laboratory (LBNL). It's projected to double by 2025 to about $9.5 billion per year.

View the full-size image.Credit: Lawrence Berkeley National Lab

These energy-efficiency programs are expected to branch beyond the traditional energy-efficiency hubs in the Northeast and West into the South and Midwest.

The research projects that by 2025, states in the Midwest and South could account for 49 percent of total U.S. spending on customer-funded energy efficiency programs -- up from 27 percent in 2010 -- with only a handful of states without significant customer-funded efficiency programs.

Along with policies requiring that utilities obtain all cost-effective energy-efficiency savings in some states and energy-efficiency resource standards, which require electric utilities to meet minimum energy savings goals each year, reliable delivery of electricity are driving these programs.

"We see some utilities turning to energy efficiency as part of their strategy for reliable delivery of electricity as older coal-fired generators are retired," said staff scientist Charles A. Goldman, a co-author of the study and head of the laboratory's energy analysis and environmental impacts department.

But challenges and uncertainties still exist. There are concerns about utility rate impacts from energy-efficiency programs, the timing and pace of the economic recovery, the long-term trend in natural gas prices, and the impact of recent and possible future changes to federal and state minimum efficiency standards for appliances and building codes.

If current policy paths continue in the right direction, annual incremental savings from electric energy-efficiency programs could reach .8 percent of retail electricity sales in 2025 -- up from .5 percent of retail electricity sales in 2010. Put in perspective for 2025, electricity savings at this level could offset the majority of load growth forecasted through that year, according to the Energy Information Administration.

"So far, only a few very aggressive states have come close to offsetting growth in electricity needs through efficiency," Goldman said. "Our finding that, in aggregate, U.S. energy-efficiency programs could offset a significant portion of projected load growth in the electricity sector over the next decade is subject to some uncertainties but striking nonetheless."

For more:
- see the report

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