Models of Efficiency

On a broad level, energy efficiency means streamlining the production and use of energy and getting more value and work out of that energy.  Energy efficiency allows society to use less energy without giving up the comfort and economic advantages it provides.  That’s a concept loaded with urgency in the 21st century.  Consider that by 2030 the nation’s population will have grown by more than a quarter and electricity use will have climbed 40 percent over what it is today.  We need to invest now to meet that future demand.  Over the next 25 years, according to the Energy Information Administration (EIA), this country will need nearly 260 gigawatts of new capacity—the equivalent of more than 850 average-sized (300-MW) plants.  And those projections already account for government-sponsored efficiency programs, utility demand-side management (DSM) programs, technological efficiency gains, and customer reaction to higher energy bills.  Expected capital expenditures generation, transmission, distribution, and environmental technologies are also enormous. (See the sidebar, “The Big Spend.”)

Rising demand is not a single issue, though. It is inextricably linked to climate change, rising energy costs, and new customer needs, all of which require the country’s urgent attention.  Programs, services, and technologies focused on improving energy efficiency can provide an important way to address these issues.  Underscoring the urgency to act are regulators and legislators who are looking for ways to support customers; and environmental groups and efficiency advocates who are petitioning public policymakers about efficiency’s role in environmental improvement; and utilities, who are the natural means to deliver energy efficiency and have the scale, customer relationships, and financial heft to do so.

Energy efficiency is a resource that can provide intertwined benefits for all those stakeholders—and it is a resource with financial value for everyone. Its use is in the public interest because it mitigates rising energy prices by reducing the need for new capacity and easing the impact of increased fuel prices, and it helps curb greenhouse gas emissions. But it demands new approaches to regulation, new ways of looking at the business of providing electricity, and new ways to use it.  Energy efficiency is an investment, just as a power plant, transmission line, meter, or emissions control technology is an investment.  Meeting the resource use and investment challenges efficiency poses requires a real partnership among regulators, utilities, customers, and other stakeholders, so that society can make energy efficiency both a sustainable business and a long-term approach to meeting our nation’s energy needs.

Read the entire article.

Also see video interview with Diane Munns.

© 2008 Edison Electric Institute