ACEEE: Leverage Efficiency in Emissions Standard

Energy efficiency could be used in an upcoming standard by the EPA to reduce CO2 levels with no net cost to the economy, according to a report by the American Council for an Energy-Efficient Economy.

The standard, currently under review by the White House Office of Management and Budget and likely to be released in early June, would set a CO2 emissions limit for existing power plants under Section 111(d) of the Clean Air Act.

The ACEEE study, which is titled Change is in the Air: How States Can Harness Energy Efficiency to Strengthen the Economy and Reduce Pollution, shows how the EPA could use four common energy efficiency policies to set a carbon pollution standard that reduces emissions to 26 percent below 2012 levels. In 2030, these policies would save 600 million tons of greenhouse gas emissions, save over 925 million MWh of electricity, reduce electricity demand by 25 percent, and avoid the need for 494 power plants.

The four policies included in the plan are: setting a state energy savings target of 1.5 percent per year, implementing updated national model building codes, constructing economically attractive combined heat and power facilities and adopting standards for five appliances.

Compliance with a new CO2 standard for existing power plants will ultimately fall to the states. Including energy efficiency in the standard as a way to meet the CO2 reduction targets will allow states more flexibility as they find ways to manage their energy portfolios, ACEEE says.

Under the plan Arizona would cut its electricity consumption by 39 percent by 2030 compared to a 2012 baseline – a larger proportion than any other state (see chart). Nebraska, the state that would benefit the least, would cut its electricity consumption by 19 percent over that timescale, the report says.

A recent report by ACEEE also found that energy efficiency is the lowest-cost electricity resource for utilities. Programs aimed at helping customers save energy cost utilities only about three cents per kilowatt hour, while generating the same amount of electricity from burning coal or natural gas can cost two to three times more.