ENERGY EFFICIENCY

The potential for increasing energy efficiency—that is, for reducing energy use while delivering the same energy services—in the United States is enormous. Technology exists today, or is expected to be developed over the normal course of business between now and 2030, that could save about 30 percent of the energy used annually in the buildings, transportation, and industrial sectors. These savings could easily repay, with substantial dividends, the investments involved. In particular, if energy prices were high enough to motivate investment in energy efficiency or if public policies had the same effect, energy use could be lower by 15–17 quads (about 15 percent) in 2020 and by 32–35 quads (about 30 percent) in 2030 than the reference case projection of the U.S. Department of Energy’s Energy Information Administration (EIA). The opportunities for achieving these savings reside in hundreds of technologies, many of them already commercially available and others just about to enter the market.

This section summarizes the capability of energy efficiency technologies to reduce energy use or moderate its growth. Technologies that pay for themselves (in reduced energy costs) after criteria have been applied to reflect experience with consumer and corporate decision making are considered cost-effective. For the buildings sector, supply curves were developed that reflect implementation of efficiency technologies in a logical order, starting with lowest-cost technological options. Using discounted cash flow1 and accounting for the lifetimes of technologies and infrastructures involved, the reported efficiency investments in buildings generally pay for themselves in 2–3 years. For the industrial and transportation sectors, the AEF Committee relied on results from the report by the America’s Energy Future Panel on Energy Efficiency Technologies (NAS-NAE-NRC, 2009c).2 For industry, the panel reported industry-wide potential for energy savings reflecting improvements that would offer an internal rate-of-return on the efficiency investment of at least 10 percent. For transportation (which addresses fewer technologies and thus includes more in-depth assessments of each), the panel focused on how the performance and costs of vehicle technologies might evolve relative to one another (and the capability of these technologies to reduce fleet fuel consumption).

1

The discounted cash flow approach describes a method of valuing a project, company, or asset such that all future cash flows are estimated and discounted to give their present values.

2

Further details on these estimates can also be found in Chapter 4 in Part 2 of this report.



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