Aggressive Efficiency Could Make Texas a Smart Energy Leader

• Apr 15, 2010

According to Energy Efficiency in the South, a report by a team of researchers at the Georgia Institute of Technology and Duke University’s Nicholas Institute, aggressive adoption of energy efficiency programs in Texas would lower utility bills by $13.7 billion and create 96,300 new jobs by 2020. Avoided annual electricity consumption is equal to the amount of electricity produced by 17 power plants in 2020.

Across the Southern region, aggressive adoption of energy efficiency programs would lower utility bills by $41 billion and create 380,000 new jobs by 2020. The study covers “the South” as it is defined by the U.S. Census – the District of Columbia and 16 states: Alabama, Arkansas, Delaware, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia and West Virginia.

Total energy demand in the South, where per capita energy consumption is already higher than average, is projected to increase 16 percent from 2010 to 2030. At the same time, many Southern states spend less on energy efficiency programs than their peer states in other parts of the country. The research strongly indicates the South’s projected growth in energy consumption need not materialize if the region begins to tap into its tremendous energy efficiency potential.

“An aggressive commitment to energy efficiency could be an economic windfall for the South,” said Marilyn Brown, Ph.D., of the Georgia Institute of Technology and co-lead researcher of the study. “Such a shift would lower energy bills for cash-strapped consumers and businesses and create more new jobs for Southern workers."

The energy efficiency policies examined by the research team fall into three broad categories: residential, commercial and industrial. Residential policies include changes to building codes, appliance standards and incentives, weatherization assistance, retrofit incentives and equipment standards. Commercial building policies include appliance standards and building retrofit incentives. Industrial policies include plant utility upgrades, process improvement policies, and combined heat and power incentives.

The report found that the adoption of aggressive energy-efficiency initiatives in the South would:

• prevent energy consumption from growing over the next 20 years (in the absence of such initiatives, energy consumption in these three sectors is forecast to grow by approximately 16 percent between 2010 and 2030),
• generate new jobs, cut utility bills and sustain economic growth. Overall utility bills would be reduced by $41 billion each year in 2020 and $71 billion in 2030; the average residential electricity bills would decline by $26 per month in 2020 and $50 per month in 2030; electricity rate increases would be moderated; and 380,000 new jobs would be created by 2020 (annual job growth increases to 520,000 new jobs in 2030). The region’s economy is anticipated to grow by $1.23 billion in 2020 and $2.12 billion in 2030.
• reduce the need for new power plants. Almost 25 gigawatts of older power plants would be retired and the construction of up to 50 gigawatts of new plants (equal to the amount of electricity produced by 100 power plants would be avoided. <.li>
• result in substantial water conservation. The reduction in power plant capacity would save southern NERC regions 8.6 billion gallons of freshwater in 2020 and 20.1 billion gallons in 2030.

“The set of energy efficiency policies we examined are also highly cost effective,” said Etan Gumerman of Duke University’s Nicholas Institute and co-lead researcher of the study. “On average, each dollar invested in energy efficiency over the next 20 years will reap $2.25 in benefits.”

The study was developed using the same state-of-the-art economic modeling tool that the U.S. Energy Information Administration uses in making its annual energy forecasts. The research team used this tool to compare a “business as usual” scenario with a scenario that included a specific set of energy efficiency investments. As the findings indicate, the analysis found substantial reductions in energy use, prices, utility bills, water use and carbon emissions in the energy efficiency scenario as compared with business as usual. This study provides a useful estimate of the benefits associated with an aggressive commitment to energy efficiency. Since it does not include every energy efficiency investment that could be considered, it is by no means an exhaustive measure of the benefits associated with an aggressive commitment to energy efficiency.

Energy Efficiency in the South and state profiles that have been developed for each of the states are available on the Southeast Energy Efficiency Alliance (SEEA) Website: www.seealliance.org/programs/research.php.

SEEA is a nonprofit organization that promotes energy efficiency in the Southeast. This project is funded with support from the Energy Foundation, the Kresge Foundation and the Turner Foundation.

Brown, a professor in the School of Public Policy at the Georgia Institute of Technology, is an internationally-recognized leader in the analysis and interpretation of energy futures in the United States. In 2007, Brown was a co-recipient of the Nobel Peace Prize along with the other members of the Intergovernmental Panel on Climate Change and Vice President Al Gore.

Gumerman is a scientific engineer. Prior to joining the Nicholas Institute, he was employed by Lawrence Berkeley National Lab and served as the lead modeler and analyst for the Scenarios for a Clean Energy Future Project. In this role, Gumerman coordinated the efforts of scientists at five national laboratories.