Residential and Commercial
The buildings sectorboth residential and commercialis the largest end-user of electricity in the United States, using more electricity than either the industrial or the transportation sectors. The buildings sector consumed a full 62 percent of the 2634 billion kilowatt hours (BkWh) generated by U.S. electric utilities in 1989 (Rosenfeld et al., 1991). The buildings sector also uses coal, oil, and natural gas for heating and appliances. In 1989 the buildings sector accounted for 36 percent of total U.S. primary energy consumption (U.S. Department of Energy, 1989b; Rosenfeld et al., 1991; see Figure 21.1).
Energy use in the United States has not increased in a linear fashion. The 1973 OPEC oil embargo created a powerful incentive to conserve energy. Figure 21.2 compares primary energy use in all sectors to gross national product (GNP), noting that, in the 1960 to 1973 period, energy use and economic production were increasing at nearly the same rate. However, from 1973 to 1986, while GNP grew by 35 percent, total energy use remained nearly constant, and oil and gas use decreased 1.2 percent annually (Rosenfeld et al., forthcoming). As a result, 25 exajoules1 (EJ) of anticipated energy usage worth $165 billion was avoided annually. In 1989, GNP projected primary energy use was 118 EJ, but only 86 EJ was actually consumed, representing a savings of 33 EJ, or 38 percent of the actual amount consumed. The average net annual savings (cost of efficiency measures less energy cost saved) during this period (1973 to 1986) from efficiency amounted to $100 billion.
Even greater savings were realized for electricity. Figure 21.3 compares
electricity use to GNP and shows that, like primary energy, electricity and economic production grew at the same rate during the 1960 to 1973 period. However, from 1973 to 1989 the growth in electricity did not keep pace with GNP. In 1989, GNP projected electricity use was 4300 BkWh, but only 2634 BkWh was actually consumed, representing a savings of 1666 BkWh, or 63 percent of the actual amount consumed. U.S. electricity revenues on sales of this 2634 BkWh were $175 billion in 1989, representing annual gross savings (i.e., avoided cost) of $100 billion and an electrical savings equivalent to the annual output of 320 base load power plants (Rosenfeld et al., 1991).
Because electricity has consistently accounted for two-thirds of all primary energy consumed in buildings and three-quarters of building energy
bills, reductions in this sector's electric demand have made an important contribution to total U.S. electricity savings. Figure 21.4 shows pre-1973annual growth rates of 4.5 percent and 5.4 percent for residential and commercialuse, respectively; during the 1973–1986 period, residential energy use remained level, whereas commercial use increased at only 1.6 percent per year. Space heating intensity in new commercial buildings also declined significantly after 1973, as illustrated by Figure 21.5 (Rosenfeld etal., 1991). In addition, efficiency measures during this period avoided an increase of approximately 50 percent in emissions of CO2,SO2, and NO2.Without these measures, coal use would have doubled (Rosenfeld et al.,1991).
Nevertheless, the buildings sector's need for energyparticularly electricityis expanding. The DOE base-case forecast projects that U.S. electricity demand for all sectors will grow by nearly 33 percent before the end of the century, an average annual increase of 2.3 percent (Edmonds et al., 1989).
A consensus is emerging in the engineering, utility, and regulatory communities that, even when past efficiency gains and projected population and economic expansion are considered, an additional, significant reduction can be made in U.S. residential and commercial electricity consumption. This reduction is not expected to sacrifice comfort levels and will cost lessin many cases, substantially lessthan the purchase of new sources of power or of power at marginal production costs.
Potential efficiency measures are varied; taken singly, each may realize only a relatively small gain. Nonetheless, their aggregate effect can be
substantial. Recently, various studies have estimated the aggregate impact of applying these technologies to both new and existing uses in the residential, commercial, and industrial sectors:
• The Electric Power Research Institute (EPRI)which is supported by the nation's electric industryrecently concluded that, by implementing existing efficiency technologies, total projected electricity use in the U.S. residential sector for the year 2000 could be reduced by 27.1 percent to 45.5 percent, with a similar reduction of 22.5 percent to 48.6 percent in the commercial sector (Electric Power Research Institute, 1990).
• Lovins (1986) found cost-effective annual electric demand savings of 73 percent in the Austin, Texas, municipal utility service territory, at an average cost of 0.87 cent per kilowatt-hour (kWh) (against a conservatively derived 2.7 cents/kWh avoided cost of operating existing plants).2
• Usibelli et al. (1983) and Miller et al. (1989), in studies commissioned by DOE and the New York State Energy Research and Development Authority, estimated potential electrical savings from efficiency at 37 percent for the Pacific Northwest and 34 percent for New York.
• An American Council for an Energy-Efficient Economy (ACEEE) study in New York State found that more than one-third (34.3 percent) of projected residential sector growth in demand for electricity use, and nearly half (47.1 percent) of projected commercial sector growth in demand for electricity, could be eliminated (American Council for an Energy-Efficient Economy, 1989). The ACEEE study relied on several restrictive assumptions, taking into account only near-term technologies and basing its estimates only on existing buildings (generally, savings are greater when efficiency measures are implemented during the construction process).
Calculating Efficiency Potential on Supply Curves
Figure 21.6 is a compilation of nine conservation supply curves that depict the technical potential for electricity savings in U.S. buildings by the year 2000. Supply curves describe, in a more rigorous manner, the way in which large-scale efficiency gains and consequent dollar and carbon emission savings are aggregated from individual energy efficiency measures. The curves relate energy savings achieved by implementing a given efficiency measure to that measure's ''cost of conserved energy" or CCE (Meier et al., 1983). Conservation supply curves are discussed in greater detail in Appendix C.
TABLE 21.1 "Prices" of Electricity at the Meter
Conserved energy may be considered a resource and plotted on a supply curve because it is liberated to be "supply" for other energy demands. Each of the energy prices described in Table 21.1 can be drawn as a horizontal line across a supply curve. All steps located below a selected price line are cost-effective, and the rational investor should take each of these steps (which are additive in effect), stopping where the staircase crosses the line. Of course, different price assumptions drastically alter estimates of dollar savings.
It should be noted that estimated savings (plotted on the x-axis) also present uncertainties. They are illustrated in Table 21.2, which compares the unit energy consumption of an average new 1990 refrigerator (1000 kWh/yr) on line 1 with the consumption of an optimal refrigerator (200 kWh/yr) on line 4. Although an engineer might assume potential savings to be 800 kWh/yr, to a utility forecaster or program manager, line 3 is more realistic and reflects a sales-weighted average of refrigerator efficiency that is below the optimum.
The studies on which the supply curves are based were undertaken by diverse groups and compiled at Lawrence Berkeley Laboratory (Rosenfeld et al., 1991). Electricity savings for the nine conservation supply curves in Figure 21.6 are calculated based on "frozen efficiency" (Table 21.2). The individual studies assumed real discount rates of 3 to 5 percent to calculate the cost of conserved electricity, but all nine have been corrected to 6 percent. Because the EPRI curve represents the approximate midrange of these curves, it has been highlighted in Figure 21.6 and will be the focus of the discussion below. It is replotted in Figure 21.7 for four different discount rates. The EPRI curve is also consistent with a new National Research Council study (National Research Council, 1990); however, the analysis presented there is too coarse to compile as a supply curve. That study estimates a near-term retrofit potential savings of 30 percent and a long-term
retrofit potential of 50 percent (National Research Council, 1990, Table 4.12). These potential savings nicely bracket the EPRI potential savings of 45 percent.
Figure 21.7 is a sensitivity analysis showing that investing up to 7.5 cents/kWhthe average U.S. price of electricity in the residential and commercial sectorswill produce aggregate electricity savings of 45 percent for all "social" discount rates: 3, 6, and 10 percent. Potential savings are insensitive to the differences among 3 percent, 6 percent, and 10 percent, but at a 30 percent discount rate, savings drop from 45 to 30 percent. At the short-term marginal cost of providing electricity from an existing base
TABLE 21.2 Unit Energy Consumption for a New Refrigerator
load power plant (3.5 cents/kWh), the 10 percent discount rate reduces energy savings to 30 percent, and at the 30 percent rate savings drop to 20 percent. However, for any price equal to or higher than the all-sector(residential, commercial, and industrial) average avoided cost of 6.4 cents/kWh (see Table 21.1), variations in discount rates below 10 percent have little effect.
Aggregate Annual Savings: $10 Billion to $37 Billion
Figure 21.8 displays the costs and technical potential of the 11-step EPRI conservation supply curve (which includes technologies that are commercially
available or that have been developed and tested), with an additional first step for white surfaces/vegetation to save air conditioning. The 12 steps, identified in Table 21.3, encompass a cumulative savings of 734 BkWh (at 7.5 cents/kWh avoided cost), which is 45 percent of 1989 residential and commercial buildings sector use of 1627 BkWh. At 3.5 cents/ kWh avoided cost, savings decline to 667 BkWh, which is 41 percent of buildings sector use. Table 21.3 lists the cost per kilowatt hour of each of the EPRI measures (plus white surfaces/vegetation) and notes that each of these measures would save energy and atmospheric carbon at a net negative costthat is, while saving money as well.
Three cases representing different annual net savings in billions of dollars are shown in Figure 21.8.
TABLE 21.3 Cost of Saving Electricity and CO2 Through Conservation in Buildings
• Case 1: Price of electricity equal to or below 7.5 cents/kWh (price of electricity to buildings). This case illustrates the highest annual net savings. Here all 12 steps are cost-effective, so all 734 BkWh is saved. The gross savings in electric bills is then $55 billion (734 BkWh × 7.5 cents/kWh). The white area underneath the curve ($18 billion) is the annualized cost of investments for the 12 steps. The light hatched area is the difference between the gross bill savings and the annualized cost of the measures. This amounts to $37 billion per year.
Case 1 applies to those regions of the United States in which the power glut is ending and utilities are contemplating building or buying new, relatively expensive capacity that will raise the price of electricity. In this case, society profits from all investments in which the cost of conserved energy is less than 7.5 cents/kWh. From the viewpoint of policy, such investments should be encouraged. This can be accomplished by making them more profitable to the utility than purchasing power or building power plants. An option discussed and recommended below is to restructure the profit rules for utilities; such measures have already been taken in New England, New York, Wisconsin, and California.
• Case 2: Price of electricity equal to or below all-sector average of 6.4 cents/kWh. This case represents annual net savings between the two extremes of cases 1 and 3. Here the first 11 steps are cost-effective, and the potential net savings (shaded hatched area) become $29 billion. The case 2 price is used for savings tabulated in the overall energy efficiency supply curve.
• Case 3: Price of electricity equal to operating cost of existing U.S. power plant equal to or below 3.5 cents/kWh. In this case, the last three steps are not cost-effective, and savings drop to 562 BkWh. At this extremely low electricity price,3 net savings from each step drop sharply, adding up to a potential net savings (cross-hatched area) of only $10 billion per year.
Nonetheless, it must be emphasized that, when any potential assumption about electricity pricing is used, these nine steps with CCE lower than 3.5 cents/kWh are always profitable to society and, if the relevant jurisdiction has updated its profit regulations, to electric utilities as well.
Transforming Electricity to Carbon
At this point, electricity savings can be transformed into units of avoided CO2, to derive Figure 21.9 from Table 21.3. Figure 21.9 is the same as Figure 21.8, with the x-axis converted to CO2 savings (1 BkWh = 0.7 Mt CO2) and the y-axis converted to cost of conserved CO2 (1 cent/kWh = $14.3/t). Figure 21.9 reveals a potential cost-effective savings of 514 Mt CO2/yr.4 This is approximately 10 percent of the total U.S. 1989 emissions
of 5 Gt CO2 and 45 percent of the total 1139 Mt CO2/yr generated as a byproduct of the electricity used in 1989 in the U.S. buildings sector. At a 6.4-cent/kWh price of avoided electricity, the 1989 savings are $29 billion, corresponding to a (negative) average cost of conserved CO2 of -$57/t CO2.
Energy Efficiency Measures
Each energy efficiency measure expected to contribute substantially to the savings estimated above is described in more detail in this section.
These descriptions are followed by brief discussions of the additional savings that can be obtained from fossil fuel efficiency measures and by switching certain end uses from electricity to other energy sources. Discussion of major electricity efficiency measures will attempt to follow the order of their cost of conserved energy, from lowest to highest, as set forth in Table 21.3; Table 21.4 lists primary energy consumption by fuel type for both
TABLE 21.4 Primary Energy Consumption for Commercial and Residential Buildings by Fuel Type, 1986 (in quadrillion (1015 Btu)
major appliances and other uses in the residential and commercial segments of the buildings sector.
In the residential and commercial building sectors, electricity efficiency technologies include such measures as
• more efficient fluorescent lamps, high-frequency ballasts, reflectors, and occupancy and daylight sensors that, together, can save up to 84 percent of lighting energy in commercial buildings while maintaining the same level of useful light (Lovins, 1986);
• superefficient appliances that, through a variety of complementary technologies, achieve the same level of performance while consuming far less energy; and
• building shell measures such as insulation, trees that shade windows, white roof and pavement surfaces that reflect sunlight, and heat-reflective windows that retain heat in winter and deflect it in summer.
White Surfaces and Vegetation
Planting vegetation and painting roof and road surfaces white can save approximately 50 BkWh/hr of the total U.S. air conditioning use of 200 BkWh/yr. Of the 50 BkWh/yr, about 25 BkWh/yr are direct savings from decreased air conditioning needs in buildings that have light-colored roofs and are shaded by properly placed deciduous trees. Indirect savings of another 25 BkWh/yr are realized once vegetation, light-colored roofs, and light-colored roadways are in place, cooling "urban heat islands" in the summer. "Urban heat islands" is the term used by meteorologists to describe the fact that in summer most cities are 2° to 5°C hotter than their surroundings. The cause is solar heat absorbed by dark surfaces, and the removal of trees that would have cooled the air by evapotranspiration. The total savings including indirect savings from the cooler cities could equal 50 BkWh/yr (Akbari et al., 1990).5
Residential and Commercial Lighting
Lighting is the largest end use in the commercial sector (257.4 BkWh/yr in 1986) (U.S. Department of Energy, 1989a) and about 11 percent of all residential electricity (90.4 BkWh/yr in 1986) (U.S. Department of Energy, 1989a). The efficiency of existing lighting can be improved through the use of compact fluorescent lamps (CFLs). Today's efficient CFLs have long life, good color, and reduced maintenance cost. Two types of CFLs are available: one with separate ballast and the other with "integrated" built-in ballast. Each can fit into a standard light socket (Lawrence Berkeley Laboratory, 1990).
Because CFLs are 4 times as efficient as incandescent bulb and last a
minimum of 10,000 hours, one 16-W CFL replaces a series of thirteen 60-W incandescents over its lifetime. It is expected that CFLs will penetrate first the commercial and then the residential markets, thus saving 50 percent of the 200 BkWh currently used annually by incandescents. By late 1990, about 50 million CFLs had been sold in the United States. These are installed mainly in some of the 300 million recessed fixtures in commercial buildings, where there appears to be no major barrier to their complete market saturation. Incandescents in these 300 million fixtures now typically use a total of 60 BkWh/yr; at least 50 BkWh/yr will be saved by the CFLs. Residential applications, which are expected to increase following market saturation in the commercial sector, will save half of the current residential lighting use, or 50 BkWh/yr. This 100-BkWh/yr savings is equivalent to 3.8 percent of the total 1989 U.S. electricity demand of 2630 BkWh. Table 21.5 compares the cost of compact fluorescents to incandescent bulbs currently in use and shows that one of the former can, by replacing 13 comparable incandescents over its lifetime of 40 months, save $28 and pay for itself on average in 7 to 21 months (Lawrence Berkeley Laboratory, 1990).
Residential and Commercial Water Heating
Some 20 to 30 percent efficiency savings can be achieved over 1987 residential practice by increasing insulation and using low-flow devices and thermal traps. Alternative water heating systems, using heat pumps or solar energy, can increase savings to 70 percent. Commercial savings, using residential measures as well as heat pumps and heat recovery systems, are estimated at 40 to 60 percent (Electric Power Research Institute, 1990).
Electric range efficiency measures include additional insulation, seals, improved heating elements, reflective pans, reduced thermal mass, and reduced contact resistance. They are expected to increase efficiency from 1987 residential levels by 10 to 20 percent and from 1987 commercial levels by 20 to 30 percent (Electric Power Research Institute, 1990).
The electricity required by commercial coolingthe second highest category of use in this sectorcan be reduced by 30 to 70 percent from 1987 levels by a combination of efficiency measures, including heat pump technologies, high-efficiency chillers, chiller capacity modulation and downsizing, window treatments, and radiant barriers. Lighting efficiency can increase estimated high-end savings by another 10 percent (Electric Power Research Institute, 1990).
TABLE 21.5 Simple Payback Calculations for a 16-W Compact Fluorescent Lamp (CFL)
Refrigerators use more electricity than any other residential appliance, and refrigeration is the second largest use of residential electricity (146.6 BkWh/yr, with an additional 59.8 BkWh/yr for freezer (1987) (Electric Power Research Institute, 1990)). The ACEEE reports that refrigerators sold in 1986 consumed an average of 1074 kWh/yr, that the best available mass-produced units in 1988 used 810 kWh (meeting the new U.S. appliance efficiency standards of about 1000 kWh/yr), and that advanced units in
the near-term would use 699 kWh (American Council for an Energy-Efficient Economy, 1989).6 Therefore an efficient refrigerator that meets upcoming U.S. appliance efficiency standards is projected to save approximately 264 kWh/yr and sell at a premium of about $66 (note that this does not include the cost of CFC phaseout discussed in Chapter 25). The cost of energy saved is 2.5 cents/kWh, compared to an average residential electricity cost of 7.5 cents/kWh (Rosenfeld et al., 1991).
Further improvement, by using such existing technologies as double gaskets, more efficient compressors and fans, and additional insulation, could reduce usage to 463 kWh/yr at a cost of 1.43 cents/kWh (Krause et al., 1988). Higher-efficiency components, including dual evaporators and evacuated-panel or low-emissivity insulation, or aerogels, could permit refrigerators to use as little as 180 kWh/yr (Table 21.2, and American Council for an Energy-Efficient Economy, 1986). In short, improved technology could increase the efficiency of new refrigerators by 4.5 times over 1990 levels, and nearly 4 times over the ACEEE advanced level. It is estimated that their retail cost would be in the range of 3.5 to 5 cents/kWh saved, well below the current U.S. average for new supply, 7.5 cents/kWh.
In addition, dishwasher efficiency improvements of 10 to 30 percent relative to 1987 residential stock are expected from models with no-heat drying cycles and from reductions in hot water usage (Electric Power Research Institute, 1990).
Office equipmentcomputers, printers, copiers, and telephones, for exampleprobably use half of the more than 1.37 quads of electricity consumed annually by the commercial sector's ''other" category (see Table 21.4 for 1986 data). Currently, all office equipment of this type, including that used in homes (which is reflected in residential sector use) is estimated to consume more than 60 BkWh/yr; demand is growing rapidly and more research is required to establish its current level (Lovins and Heede, 1990). It is estimated that existing technology and advanced management techniques could reduce total electric input for office equipment by 60 to 70 percent in the short term, and by up to 90 percent in the longer term (Lovins and Heede, 1990).
Building Shell Efficiency
Space heating, at 157.4 BkWh/yr (1986) (U.S. Department of Energy, 1989a), represents the largest use of electricity in the residential subsector. There, energy efficiency requires measures for specific regions of the country, based on their climate and building practices (National Association of Home Builders Research Foundation, Inc., 1985; Energy Information Administration,
1988). Building shell efficiency can be improved through thicker or more efficient wall, ceiling, floor, and pipe insulation; "low-E" (high reflectivity to heat) glazing or superwindows; and caulking and weatherstripping. Indeed, 36.6 percent of all single-family households in the United States lack insulation in their roofs or ceilings (Energy Information Administration, 1987).
Passive solar techniques can also be used in existing and new buildings. These measures include concentration of window area toward the south to maximize collection of solar heat during cold months and construction of overhangs to provide shade during the summer (U.S. Department of Energy, 1989b).
Potential Fossil Fuel Savings in Buildings: $20 Billion per Year
As shown in Figure 21.1, the buildings sector consumes primary energy that has not been converted into electricitymainly oil and natural gas. This also represents a source of savings from energy efficiency measures.
In 1989, residential and commercial buildings used about 12.6 quads (1015 Btu; see note 1) of fuel7.7 quads of natural gas, 2.7 quads of oil, 0.2 quads of coal, and about 2 quads of wood (wood is not discussed here because it produces no net CO2). Natural gas and oil are interchangeable in commercial furnaces and water heaters, so they are grouped together to estimate potential fuel savings. This fixes the base case ("frozen efficiency") for fuel use at 10.4 quads/yr.
There have been only two thorough efficiency studies of fuel use in buildings, a study of the U.S. residential sector by the Solar Energy Research Institute (SERI, 1981) and a study of the California residential sector by Meier et al. (1983). Both were conducted in the residential sector, involved natural gas, and used a discount rate of 6 percent. However, oil and gas are interchangeable in commercial applications, and the technologies that use oil or gas in residential applications are very similar in design. Figure 21.10 shows that about 50 percent of all residential natural gas use can be saved at a cost of less than the current average natural gas price of $5.63/MBtu. Extrapolating this estimate to cover all gas and oil use in buildings yields savings of about 5.2 quads; after subtracting the $10 billion annualized cost of the efficiency investment, net savings are nearly $20 billion per year.
To transform fuel savings to CO2 savings, it is necessary to convert the x-axis in Figure 21.10 to avoided CO2. This is done by adding the CO2 that oil and natural gas contribute to base-case fuel use in buildings.7 Weighting these fuels by their respective carbon contents (based on their relative use) yields an estimate that 1 MBtu "fuel" is equivalent to 16 kg carbon and 59 kg CO2, and, further, that 1 quad "fuel" is roughly 59 Mt CO2. The y-axis
is converted by dividing by 6, so $1/MBtu = $17/t CO2. The net CC CO2 is shown in the right-hand scale of Figure 21.10, running down from 0 to -$95/t CO2. The average CC CO2 is about -$70/t CO2. The potential carbon savings are about 300 Mt of avoided CO2. This is about 6 percent of the total U.S. 1989 emissions of 5 Gt CO2.
In industry an observed tendency exists to substitute fuel for electricity, but in buildings, fuel switching primarily involves replacing electric resistance heat with on-site combustion of natural gas. This can reduce operating expense and CO2 emissions by about one-third for the U.S. mix of fuel used for electricity generation.
Fuel switching is the least well-studied conservation option in the U.S. buildings sector. This is so because, first, under the existing regulatory regime governing utilitiesat least until recently in some jurisdictionselectricity sales lost through fuel switching invariably reduced the utility's revenue and profits. Second, the geographic distribution of fuel switching potential is uneven and thus is not tabulated in DOE's Residential Conservation Survey (Rosenfeld et al., 1991). Geographic distribution depends on recent competitive marketing programs by electric and gas utilities. Thus, in California, most homes have gas heat and gas on the premises, but in northern California, only 22 percent of homes have gas clothes dryers versus 60 percent in southern California. If Pacific Gas and Electric (PG&E) had the same gas appliance saturations as Southern California Edison, PG&E's peak demand could be reduced by 360 MW (Rosenfeld et al., 1991).
Switching hot water heaters from electricity to natural gas represents the largest potential of this type in the United States. A 1988 Michigan study demonstrated that 400,000 homes with gas heat but electric resistance water heaters could be switched to gas hot water heat, with a simple payback time of 2 years (Krause et al., 1988) and that fuel switching in Michigan had the potential to save about 20 percent of residential electricity. However, Michigan appears to have a higher fraction of homes with gas available than does the rest of the United States, so the results shown here may not be widely applicable. A 10 percent reduction in all residential electricity use would appear to be a reasonable approximation for fuel switching potential nationally; the results, based on this assumption, are presented in Table 21.6.
Fuel switching as an energy efficiency policy is attracting interest in several locations. In Vancouver, Canada, BC Hydro gave subsidies to consumers to replace electric water heaters with gas units. Several utilities in Vermont are developing or considering the development of fuel switching programs aimed at space and water heating to reduce peak winter demand.8 Massachusetts utility regulators recently ordered utilities in that state to consider this option.9 In Wisconsin, the Public Service Commission has directed utilities to encourage fuel switching where cost-effective.
Discussion so far has focused on retrofitting existing buildings, developing more efficient appliances, and installing more efficient equipment in both existing and new buildings. However, efficiency gains can also be realized during the construction process. New buildings can be designed and constructed to conserve both electricity and fuel, primarily as they are used for space heating. Nonetheless, both potentials are surprisingly small (Rosenfeld et al., 1991).
Currently, fuel use in buildings amounts to about 10 quads/yr, with a
TABLE 21.6 Fuel Switching Example of Saving 10 Percent of a Building's Electricity by Switching Water Heaters from Electric Resistance to Gas Heat (discount rate = 6 percent)
retrofit potential of about 5 quads. Making new buildings more fossil fuel efficient than current practice is expected to save only about 0.5 quad/yr after a decade of construction, or 2 quads/yr after 40 years, the longest time horizon used in a recent study (Rosenfeld et al., 1991). The potential savings in electric space heating per decade of construction are slightly smaller than for fuel, because little electricity is used for space heating.
The reason for this surprising result is that new buildingswith better insulation, better windows, and fewer draftsnow use very little space heat. It is interesting that new homes are being added to U.S. stock at about 2.2 percent per year, and old homes are being retired at about 0.7 percent per year (i.e., about 3 times more slowly). Yet each of the old homes consumes about 3 times as much gas for space heat as each of the new ones, so there is little net increase; a similar finding applies to commercial buildings. Optimal new homes need only one-quarter as much space heat as the average home built in 1989, and optimal office buildings use almost no space heat at all, so there is not much heat left to save. Efficiency gains in new buildings are discussed further in Rosenfeld et al. (1991) and Bevington and Rosenfeld (1990).
Summary of Potential Savings in the Buildings Sector
Combined savings in the buildings sector are 850 Mt of CO2 (513 Mt CO2 for electricity, 300 Mt for fuel, and 74 Mt for fuel switching). This is
equivalent to about 50 percent of the total CO2 emitted into the earth's atmosphere as a result of energy use in the nation's buildings sector, and 17.1 percent of U.S. annual emissions of 5000 Mt CO2. Annual net dollar savings are $29 billion for electricity, $20 billion for fuel, and $4.3 billion for fuel switchinga total of $53 billion. This is equivalent to 12 percent of the total 1989 U.S. energy bill of $450 billion. These results are summarized in Table 21.7.
Nonetheless, it is unlikely that this potential will be fully achieved in the absence of effective policy tools and particular incentives (discussed below) to make energy efficiency more profitable to utilities than burning increasing quantities of fossil fuel, especially coal.
TABLE 21.7 Summary of the Potential Savings of Electricity, Fuel (Gas and Oil), and CO2 for Existing Buildings (discount rate = 6 percent)
Barriers to Implementation
Past experience in attempting to implement energy efficiency programs has demonstrated that a number of obstacles may inhibit the achievement of optimal electricity efficiency in the residential and commercial sectors.
After the precipitous drop in oil prices in late 1985, efficiency trends in primary energy began to decline. As shown in Figure 21.4, energy use in the residential and commercial buildings sector grew at more than 3 percent per year from 1986 to 1989; Figure 21.3 shows that total primary energy use once again escalated at nearly the same rate as GNP between 1986 and 1988, with energy consumption leveling off slightly in 1989. From 1973 to 1988, GNP grew 46 percent, and energy use 7 percent. Virtually all of this 7 percent increase from 1973 to 1988 occurred during the last 4 years (U.S. Department of Energy, 1989c; Rosenfeld et al. 1991; Figure 21.3). Although they have produced some gains, it is clear that market forces have not achieved optimal efficiency in this area (Hirst, 1989b). As a result, it is useful to expand upon the institutional and economic restrictions that appear to inhibit the translation of efficiency potential into electricity savings. Recent research highlights the variety of barriers that exist (Hirst and Brown, 1990):
• Perhaps most important is the empirical observation that most businesses and homeowners will not invest in large-scale energy-saving improvements unless the investment can be recovered almost immediatelytypically in no more than 2 years (see Figure 21.11) (Putnam, Hayes and Bartlett, 1987; Plunkett, 1988; Wiel, 1989; Hirst and Brown, 1990).
• Information about the cost, reliability, and performance of efficiency technologies is not widely diffused, particularly among consumers (Putnam, Hayes, and Bartlett, 1987; Hirst and Brown, 1990).
• Rental and speculative buildings are subject to the problem of split incentives. Landlords have little reason to invest in efficiency measures when the energy bill is passed on to tenants, whereas tenants rarely make such investments because their tenure in the building is typically uncertain. Likewise, given far-from-perfect information among consumers, speculative builders are less likely to invest up front in premium-cost, high-efficiency measures because they will not pay for energy use in the building after its purchase (Putnam, Hayes, and Bartlett, 1987; Hirst and Brown, 1990).
• Another barrier to adoption of more efficient technology is aesthetic. Objects lighted by fluorescent lamps sometimes do not look natural to consumers. Problems of color rendition have been mitigated to a considerable extent by reformulation of phosphors, and many new high-efficiency bulbs can fit into conventional sockets, permitting consumers to use existing lamps and fixtures. Nonetheless, additional data on consumer acceptance of efficiency measures are needed; they are expected to be developed as part of the continuing, large-scale efficiency efforts discussed below.
These obstaclescombined with others, such as the perceived risk of energy efficiency investments, constraints on the infrastructure of energy efficiency vendors and suppliers, and uncertainty about future fuel pricesprovide formidable resistance to the realization of technical efficiency potential (Hirst and Brown, 1990). It is also possible that regulation has kept the price of electricity below its marginal cost. If this is the case, reform of utility ratemaking could raise the price of electricity and lead consumers to invest more in energy conservation. A final barrier should be mentioned: lack of national data on energy efficiency. Since the early 1980s, DOE has greatly restricted its role in collecting such information, and state governments and utilities have made only limited efforts to do so. As a result, relatively few rigorous data exist on the performance and cost-effectiveness of energy efficiency programs (Hirst, 1989b).
Several options are available for implementing an energy efficiency program:
• Regulatory reform designed to make energy efficiency the most profitable resource option for electric and natural gas utilities
• Stronger appliance efficiency standards and energy-efficient building codes
• Direct subsidies in the form of tax credits, loans (including low-interest loans), and grants to encourage energy efficiency benefitsincluding revenue-neutral tax measures such as variable hookup fees for buildings
• Direct government control requiring all electric utilities to develop and implement broad-based, comprehensive energy efficiency programs
• Public education
Each of these options is discussed below.
Direct Investment in Efficiency by Utilities
Experience suggests that, as a matter of policy, the potential for large, cost-effective efficiency savings may not be realized unless the economic and organizational burden of such a program is placed on those who will directly receive its benefitselectric utilities and their customers. Utilities are in the best position among society's institutions and economic actors to overcome the barriers described aboveparticularly those relating to technical knowledge, access to information, ability to develop programs suited to a particular region's efficiency potential and supply mix, need for a delivery mechanism, and expectations regarding rate of return and, more generally, profits. In addition, utilities are in the best position to respond to economic (although not necessarily regulatory) forces that make it desirable to deliver energy services at the lowest possible cost.
As noted, consumers generally require no more than a 2-year payback on efficiency investments (a 33 to 100 percent internal rate of return). Conversely, collective social investment in power generation (e.g., by electric utilities) rarely repays utility shareholders or ratepayers in less than a decade. As a result, many efficiency investments rejected by consumers would appear favorable to a utility (Hirst and Brown, 1990).
At least since the first OPEC oil price shock, numerous observers have suggested that this market disconnection be remedied by placing the purchase of both demand and supply options under the unified control of the utility (Lovins, 1977; Roe, 1984). Beginning in the late 1970s, electric utilitiesoften guided by federal mandatebegan to experiment with energy efficiency by funding residential energy audits and informational campaigns.
However, other than by promoting load management programs (shifting the time of use of electricity without necessarily decreasing total electrical demand), utilities rarely attempted to realize the benefits of energy efficiency by making extensive direct capital investments in customer facilities (Investor Responsibility Research Center, 1987; Vermont Public Service Board, 1991). Indeed, as discussed below, the regulatory regime in virtually every state has inhibited such efforts (Moskovitz, 1989), because it in effect penalizes a utility that seeks to provide energy services through efficiency.
Although much has been accomplished to convince a number of utilities to begin undertaking aggressive direct investments in efficiency, most analysts agree that continued progress in the case of privately owned utilities (which supply 83 percent of the nation's retail electricity (Cambridge Energy Research Associates and Arthur Andersen and Company, 1989)) depends on changing the economic rules under which these firms operate.
Under the current rate regulation system, nearly every unit of electricity sold contributes profit to the utility's shareholders; conversely, every unit of electricity not sold due to efficiency improvements deprives the utility of profit (Kahn, 1988). Under these rules, an electric company responsible to its shareholders is likely to undertake efficiency investments only to the extent that they are absolutely required to avoid rate disallowances or other regulatory sanctions (DeCotis, 1989; Hirst, 1989a; Moskovitz, 1989; Wiel, 1989).
Incentives in Practice
Recently, a variety of proposals have been put forward to align the privately owned utility's profit motive with the public interest in promoting electrical efficiency. All of them involve a mechanism by which an electric company can profit as much or more from making its customers energy efficient as from maintaining or increasing electric sales (Hirst, 1989a; Moskovitz, 1989). This is consistent with recent action by the National Association of Regulatory Utility Commissionersa nationwide group representing the state agencies that regulate most utilitiesendorsing the concept that a utility's "least-cost" plan should represent its most profitable course of action (National Association of Regulatory Utility Commissioners, 1989).
One such approach, recently adopted by utility regulators in Rhode Island, Massachusetts, and New Hampshire, allows utility shareholders to recover through the rate structure the direct costs of efficiency programs and to keep as profit a portion of the total economic savings created by these investments (Massachusetts Department of Public Utilities, 1990; New Hampshire Public Utilities Commission, 1990; Rhode Island Public Utilities Commission, 1990). Under this approach, the largest retail utility in
Massachusetts, Massachusetts Electric Co., will boost its 1990 net earnings by at least $5.3 millionor 8.5 percentby implementing an aggressive efficiency investment program. Although large, this incentive payment represents less than one-tenth of the net savings ($56 million) that will accrue to the utility's customers through lower energy use (Massachusetts Department of Public Utilities, 1990); nonetheless, to the utility it represents an attractive investment23 percent of 1989 net income (New England Electric System, 1990b). Highlights of other incentives are as follows:
• In Rhode Island, Narragansett Electric Co. received approval for a $1.7 million incentive payment on net customer savings of $17 million. The incentive represents 10 percent of after-tax 1989 income (New England Electric System, 1990b).
• The New Hampshire Public Utilities Commission recently approved an incentive of up to $400,000 on a $1.7 million efficiency program, expected to produce customer savings of $2 million. After taxes, the incentive is 50 percent of 1989 income (New England Electric System, 1990b).
National Demonstration Projects
Two major programs in the United States have helped to demonstrate, under real-world conditions, that energy efficiency programs directed by utilities are a primary option among policy alternatives that may be selected to mitigate greenhouse warming. These programs were developed in the Pacific Northwest and New England. A third program was initiated in California in 1990.
Pacific Northwest The Pacific Northwest was the first region in the United States to undertake a major utility-driven program to improve electrical energy efficiency. Under the Pacific Northwest Electric Power Planning and Conservation Act of 1980, Congress authorized the creation of a multistate electric planning agencythe Northwest Power Planning Councilcovering Oregon, Washington, Idaho, and western Montana. The council was charged with developing a plan that would require the region's utilities to invest in efficiency improvements rather than new electric supply, whenever the former cost less.
Over 8 years (1981 to 1989), the region's major electric utilitythe federal Bonneville Power Administration (BPA)invested more than $600 million to enhance efficiency in residential and commercial buildings and in industrial facilities. As a result, BPA saved nearly 300 MW in generating capacity, at a cost of approximately 2 cents/kWh (Bonneville Power Administration, 1990)less than half the cost of obtaining the equivalent supply from new coal-fired generation (Northwest Power Planning Council, 1989). From 1978 to 1988, expenditures on energy efficiency savings in
areas served by Pacific Northwest utilities, including the BPA, totaled approximately $1.3 billion (Lee, 1989). In addition,two pilot projects conducted in the region illustrate the effectiveness of direct capital investment in customer facilities:
• In the Hood River Conservation Project, the utility analyzed, supervised, and completely paid for full weatherization of electrically heated homes in a single county; the program achieved a participation rate of 85 percent (Hirst, 1987). Per-home weighted average savings were 2600 kWh/yr at a per-home cost $4400, annualized at 7.1 cents/kWh. Although this average is high, Hood River was designed to explore the limits of cost-effective conservation.
• In the other program, called Energy Edge, the utility provided comprehensive design assistance and paid the full cost of increasing energy efficiency in new commercial buildings above the level required by a model building code. Initial estimates projects that Energy Edge will increase efficiency in treated buildings 30 percent above the levels that would have been achieved through application of the already energy-efficient building code effective in the region. Program cost is about 2.1 cents/kWh, half that of the cheapest supply option (Anderson et al., 1988; Benner, 1988).
Notwithstanding the findings of these pilot programs, the region drastically reduced its efficiency investment activity in the mid-1980s, when demand slowed in response to a lagging regional economy (Northwest Power Planning Council, 1987; Collette, 1989); currently, efficiency budgets are again on the rise as the region moves out of a power deficit condition.
New England In 1988, New England became the site of a program designed to test the real-world feasibility of large-scale efficiency projects implemented by electric utilities.
Rapid economic growth in the Northeast, combined with the region's aging stock of electricity-generating plants and the regulatory and political difficulty of siting new ones, led to predictions of severe electric capacity shortages in New England as early as the late 1980s (Russel, 1989). In 1987 the Conservation Law Foundation, Inc., a Boston-based environmental organization, led a consumer and environmental coalition in extensive administrative litigation before the region's state utility regulators. It proposed that, prior to constructing substantial new power facilities, utilities should be required to undertake extensive, direct investments in energy efficiency at customer sites (Collette, 1989; Russell, 1989; Flavin, 1990).
By mid-1990, as a result of favorable agency action and voluntary settlements, 15 retail electric power companies in New England and New York had agreed to cooperate with state regulators and public interest groups to design, implement, monitor, and refine programs for large-scale direct efficiency
investments to reduce customer electricity use (Cohen, 1990). Under these programs, the utilities analyze customer homes and commercial facilities for potential efficiency improvements costing less than equivalent power generation; arrange and supervise installation of the measures; and, in most cases, pay the full installation and labor costs associated with each project (New England Electric System and Conservation Law Foundation, Inc., 1989). Eleven of these utilities have together committed to spending at least $1.2 billion on efficiency during the next 5 years, equal to 2.4 to 8.2 percent of their annual (1987) revenues. The largest utility in Massachusetts projects that it will save 10 percent of its 1987 peak load capacity by the fifth year of its program and 28.2 percent by the twentieth year (Chernick, 1990).
Ultimately, firm conclusions concerning the energy yield of these efficiency efforts must await the results of their specific measurement and evaluation protocols. The New England utilities currently have not developed detailed estimates of long-term savings because programs have been in the field for only 2 years at most. However, it is conservatively projected that they will eliminate between one-third and one-half of the other-wise-realized demand growth (Wald, 1988; Destribats et al., 1990). In addition, a technical potential study suggests that the region's total electricity generation requirements would remain constant (at 96,000 GWh) from 1985 to 2005 if all cost-effective, commercially available efficiency measures were implemented and that the requirements could be reduced by 33 percent if the measures encompass expected technological developments (New England Energy Power Council, 1987). It is also estimated that, if all cost-effective efficiency improvements were implemented, by the year 2004 New England electric utilities could reduce CO2, SO2, and NO2 emissions by 38.9 Mt/yr, 169,000 t/yr, and 133,000 t/yr, respectively (Banwell et al., 1990).
In the field, early data suggest that a comprehensive, utility-driven and ratepayer-funded approach may be an effective means of implementing investment in electrical efficiency:
• In one program in Rhode Island that involved direct installation of, and full payment for, high-efficiency lighting in small commercial buildings, a participation rate of more than 90 percent was achieved among customers contacted. Anticipated savings for the current version of this program are 10 to 15 percent of total kilowatt-hours used by participating customers. More than 600 buildings were treated in 6 months (M. Miller, New England Electric System, personal communication to Robert H. Russell, Conservation Law Foundation, Inc., May 23, 1990; New England Electric System, 1990a; Liz Hicks, New England Electric System, personal communication to Robert H. Russell, Conservation Law Foundation, Inc., August 22, 1990).
• In a residential program mounted by the same utility, which provides high-efficiency lighting and hot water conservation measures to low-income neighborhoods, the utility achieved a penetration rate of more than 50 percent in the targeted areas (Liz Hicks, New England Electric System, personal communication to Robert H. Russel, Conservation Law Foundation, Inc., August 22, 1990).
• In its first 18 months of operation, a Northeast Utilities program involving Connecticut Light and Power and Western Massachusetts Electric Company has treated with a package of efficiency measures approximately 24 percent of all projected new floor space in its service territory and estimates savings to be at least 20 percent above baseline practice (Connecticut Light and Power Company, 1990). The program pays for the full cost of improving electrical efficiency in new buildings and industrial plants. As of August 1990 the retail utilities had entered into contracts that offered $5.5 million in incentives and would create an estimated 24,357 MWh of annual electricity savingsat a cost per kilowatt-hour saved of approximately 3 cents (Frederick F. Wajcs, Jr., Northeast Utilities, personal communication to Armond Cohen, Conservation Law Foundation, Inc., August 22, 1990).
• Recently, a large New England utility estimated that one of its least-expensive future supply options, a combined cycle plant, would cost nearly twice as much (8.3 cents/kWh) as each of three efficiency programs it is in the process of implementinga commercial and industrial building retrofit program (4.3 cents/kWh), a program to improve the efficiency of new commercial buildings and industrial facilities (5.2 cents/kWh), and a residential new construction program (4.4 cents/kWh) (New England Electric System, personal communication to Conservation Law Foundation, Inc., June 7, 1990).
California Following New England's lead, the four largest electric and natural gas utilities in California recently announced stepped-up investment plans aimed at doubling their 1988 efficiency investments (collectively about $150 million per year (A&C Enercom et al., 1990)) within 2 yearsan additional aggregate annual expenditure of nearly $150 million (Collette, 1990). Thus they are expected to approach the investment level of the early 1980s, approximately $320 million per year, or 2 percent of revenues (A&C Enercom et al., 1990).
Under the California ''collaborative process," the four utilities have negotiated with regulators and public interest groups to implement new investor incentives designed to make efficient energy savings more profitable than selling additional kilowatt-hours of electricity or units of natural gas. Each utility has negotiated a different investor incentive. Pacific Gas and Electric, California's largest utility, has been the most aggressive and has developed a program where savings generated can be shared between ratepayers
and the utility's investors in the ratio of 85:15. One example of the earnings that are expected to be achieved involves plans by Pacific Gas and Electric to give compact fluorescent lamps to its customers. The wholesale cost of each lamp is about $10, with advertising and delivery adding another $2. The utility recovers this $12 promptly from its ratepayers through adjustments in the utility rates that customers pay. During its life, the lamp will avoid about $42 of electric bills; so the net savings is $30, assuming an undifferentiated rate structure. The utility's investors are permitted to retain 15 percent of these savings, or $4.50. This is paid out over 3 years, producing a highly favorable internal rate of return.
Pacific Gas and Electric has implemented a $100-million-per-year shared savings program that is expected to yield 1990 earnings of $30 million to $40 million, a 4 to 5 percent increase over typical profits of $800 million (D. Schultz, California Public Utilities Commission, private communication to Arthur M. Rosenfeld, Lawrence Berkeley Laboratory, May 1990). Other utilities have proposed more modest incentives, such as a premium rate of return on investments on demand-side measures.
Appliance Efficiency Standards and Building Codes
One mechanism that has been used to increase efficiency is the imposition of efficiency standardsfor example, forthcoming standards under the U.S. National Appliance Efficiency Act, fluorescent ballast standards, and efficiency-oriented building codes. Although useful, direct government regulation of building and equipment efficiency may not realize optimal efficiency investment.
National standards usually will be set to the level that is cost-effective for national average energy costs. Avoided energy costs vary between utilities and regions (Cambridge Energy Research Associates and Arthur Andersen and Company, 1989). Higher efficiencies will be cost-effective in some areas, and lower efficiencies will be cost-effective in others. For example, the U.S. National Appliance Energy Conservation Act mandates only those efficiency improvements that carry a 3-year payback or less (Rosenfeld, 1988). Moreover, the electric efficiency levels of the most advanced state building codes can be cost-effectively exceeded by more than 30 percent (Benner, 1988). Statewide standards are more likely to reflect local cost conditions; unfortunately, costs vary widely even within states, and many states do not have the bureaucratic infrastructure to support efficiency standard setting (Paul Chernick, Resource Insights, Inc., personal communication to the Conservation Law Foundation, Inc., May 31, 1990).
In addition, standards generally must take into account, on a national level, the practical limits that manufacturers face in producing the new efficient equipment. Thus utility programs that are phased in over time may
afford a more practical approach to the development of necessary markets (P. Chernick, personal communication to the Conservation Law Foundation, Inc., May 31, 1990).
Government Subsidies and Tax Policy
Tax credits, loans (including low-interest loans), and grants represent an alternative policy option that all levels of government, but particularly the federal government, have used to promote efficiency investments by individuals and firms.
However, this approach has many of the same drawbacks as do standards (P. Chernick, personal communication to the Conservation Law Foundation, Inc., May 31, 1990). In addition, direct subsidy does not necessarily encourage investment in cost-effective, comprehensive energy efficiency. The market barriers outlined aboveparticularly those relating to information costs, risk aversion, split incentives, and need for rapid payback of investmentwill continue to operate unless programs underwrite much of the cost of proven efficiency measures (Plunkett and Chernick, 1988).
If government funding is provided by direct subsidy, this will not only require additional layers of management but also transfer payments from taxpayers to electricity users. Such transfers may not drastically redistribute wealth, but they will have to be authorized by a legislature that has shown little interest in obtaining energy efficiency by regulation at this scale.
One concept that attempts to combine features of a taxation system with direct regulation may hold more promise. This is a so-called "fee-bate" revenue-neutral systemcurrently only at the stage of proposed legislationthat sets a target peak demand or target energy consumption (or both) per square foot for particular building types. Buildings that exceed the target pay into a fund, and those using less than the target energy collect a rebate from the fund. The target would be adjusted to provide the desired incentive, and the fee and rebate levels would be calibrated so that one cancels the other (Rosenfeld, 1988).
Like standards, this system of fees and rebates tied to building efficiency involves a lower degree of governmental intervention and cost, but, unlike standards, it offers an incentive to exceed the target. In addition, by using baseline standards and by setting rewards and penalties that may increase with distance from the target, the system can encourage efficiency in proportion to its added social value.
Direct Governmental Control
The government might consider the creation of a comprehensive efficiency assessment and delivery structure to identify and implement all cost-effective
efficiency measures. To avoid unfair burdens on taxpayers with low electric usage and limited opportunities to participate, the cost of the program could be recovered through assessments on electric utilities and other energy providers.
The advantages of this type of approach include the ability to cover all energy uses (electricity, natural gas, and oil) and geographic comprehensiveness. Disadvantages include the duplication of existing utility relationships with customers, the creation of an additional governmental bureaucracy, the overhead costs of public accountability, the possibility that a market-based incentive system would achieve the same result at a lower cost to society, and the risk that if the program failed its failure would be total, representing a nationwide setback for energy efficiency. Perhaps most important, the establishment of such a governmental structure for delivery of efficiency services does not seem to be as politically feasible as the creation of a regulatory environment that encourages utilities to provide these services (P. Chernick, personal communication to the Conservation Law Foundation, Inc., May 31, 1990).
Although policymakers are increasingly recognizing energy efficiency's considerable potential, members of the public and many of their representatives do not appear to be aware of the large costs involved in failing to take efficiency measures. Corrective educational efforts are particularly important in view of the earlier discussion concerning implied discount rates and the fact that in many cases the consumer, rather than the technology or the law, will have the final say on whether to adopt a given efficiency measure. Such efforts could focus on the individual economic benefits of increased efficiency, its relative lack of disadvantages, and the environmental cost (particularly the portion that will be assessed to future generations who are not currently represented in the political process) of unnecessary deployment of central generation plants. Indeed, given the extent to which policy changes must be made before theoretical efficiencies can be realized, no large-scale efficiency initiative, however structured, may be feasible without a fundamental alteration in public attitude. This is an area in which federal education could help to overcome transaction costs, although it should be noted that energy prices continue to exercise an important influence on consumer knowledge and choice. The development of clear and informative consumer energy bills, properly corrected for price and weather, is one area in which federal research funding could promote the refinement of what is essentially a price-driven mechanism (Kempton and Montgomery, 1982; Kempton, 1989; Kempton and Layne, 1989).
The industrial nations, including the United States, have realized major efficiency gains during the past 15 years. This trend can be accelerated and, with U.S. assistance and leadership, even replicated in other nations. In many cases, efficiency investments that approach avoided cost in this country can be implemented at a far lower cost elsewhere (U.S. Agency for International Development, 1988, 1990).10
Growth in electric demand in the developing world is proceeding at a rate that is nearly 3 times higher than that forecast for the United Statesbetween 6.6 and 7 percent annually (Munasinghe et al., 1988; Moore and Smith, 1990). Less-developed nations in Asia plan to more than double their installed capacities between 1989 and 1999 (Moore and Smith, 1990). Other nations predicting rapid growth, such as Brazil, forecast expansion of electricity production by as much as 150 percent during the next 15 years (Geller, 1986). As a consequence, during the next three to five decades, the United States and other Organization for Economic Cooperation and Development (OECD) nations are expected to account for a declining share of greenhouse gas emissions, whereas rapidly industrializing developing nations will contribute a far greater share (U.S. Agency for International Development, 1990).
A recent World Bank study of 70 less-developed countries (LDCs) concludes that these nations have plans to increase coal-fired generation during the 1989–1999 decade from 907 BkWh44.7 percent of the total supply of electricity for these nationsto 1793 BkWh46.6 percent of the total supply 10 years later; this represents a 98 percent increase in the use of coal in one decade. China, one of the nations in the study, anticipates an increase in its coal-fired generating capacity of 64,000 to 90,000 MW by the year 2000 (World Bank, 1985; Moore and Smith, 1990). For a variety of economic, logistical, and safety reasons (particularly in the wake of Chernobyl), as well as matters relating to public perception, nuclear power is not expected to make a substantial additional contribution in the next two decades (Flavin, 1987b; Keepin, 1988; Moore and Smith, 1990).
Deployment of fossil fuel capacity on this scale carries with it major economic consequences that may strain national economies. The less-developed nations already spend $50 billion to $100 billion per year, a quarter of their public debt, on power supply expansion and improvement (India, China, and Brazil account for about one-half of the total); approximately one-fifth of all funding from the World Bank and regional development banks is applied to power supply development (Heron, 1985; Flavin, 1987a; Churchill and Saunders, 1989). By 2008, in the absence of substantial efficiency improvements, it is estimated that 1500 GW of additional generating capacity will be needed in the developing world, at a cost of approximately $2.6 trillion, equal to more than $125 billion per year (U.S. Agency
for International Development, 1988); by contrast, in 1988, total installed generating capacity in the United States was 658 GW (Cambridge Energy Research Associates and Arthur Andersen and Company, 1989).
A recent analysis of the developing world concluded that efficiency improvements could reduce total generating capacity needs by more than half, with annual savings of $15 billion to $50 billion (U.S. Agency for International Development, 1988). The buildings sector efficiency measures described in this chapter may be particularly important in view of the fact that, throughout the 1980s, electricity consumption in residential and commercial buildings significantly outpaced growth in total electricity consumption in many developing countries; this trend is expected to intensify (U.S. Agency for International Development, 1990). Two major efficiency opportunities are lighting, which accounts for 20 percent of U.S. electricity consumption and nearly that in many developing nations (e.g., 17 percent in India), and large commercial buildings, which consume large amounts of electricity and do not significantly vary in design worldwide.
Despite the apparent existence of promising energy efficiency opportunities in the developing world, major sources of seed capital have yet to make a significant commitment to this potential. The World Bank, for example, continues to support major power supply projects at the expense of energy efficiency. In 1990, it was estimated that a mere 1 percent of the bank's energy loans were conservation-related.
In one of the few practical attempts to apply the concepts described earlier in this chapter to conditions in a developing nation, the Conservation Law Foundation, Inc., a Boston-based environmental organization, is currently working with the Jamaica Public Service Company, that island nation's government-owned utility, to design and implement comprehensive energy efficiency measures of the type now in place in New England. A recent study performed in Jamaica reaches the following conclusions:
1. For less than the avoided cost of producing power, Jamaica could save more than 20 percent of projected system load during the next 10 to 15 years; long-term savings could reach 40 percent of projected demand. The cost during the next 15 years would be about $80 million (1990 net present value dollars discounted at 10 percent).
2. The project would reduce the cost of providing power by about $277 million, reduce imports by about $188 million, and avoid environmental damage valued at about $476 million (Conservation Law Foundation, Inc., 1990).
Other Benefits and Costs
Although not included in the cost-benefit calculations that appear in this report, other significant positive effects may result from the efficiency strategy
described in this chapter. These are in addition to the benefits realized from mitigation of greenhouse warming and may not be taken into account in the direct price of energy or its inputs. Nonetheless, they are real and should be considered during the process of designing an optimal policy "mix" directed at reducing carbon emissions. They include the following:
• Power costs and reliability: The cost of stretching existing supplies by investing in efficiency averages half (or less than half) the cost of building new power plants. This means that an energy-efficient economy will produce more competitive products, increase disposable consumer income, and reduce capital outflows for expensive plant construction and imported fuel (an especially important advantage for developing countries). End-use efficiency also makes power systems more reliable by dampening the demand swings that can be caused by extreme weather and economic cycles, and it makes utility planning less volatile by allowing incremental investments rather than massive power additions.
• Other environmental benefits: Greenhouse warming is far from the only major environmental threat posed by electricity production. Fossil fuel power plants in the United States account for about two-thirds of the major acid rain precursorSO2; one-third of the major smog precursorNO2; and a variety of toxic pollutants. Large-scale hydroelectric projects can destroy precious plant and animal habitat, displace native populations, and dramatically degrade water quality. Nuclear power plants generate substantial quantities of high-level radioactive waste, whose disposal to data has proved technically debatable and politically intractable. In addition, land use problems can be avoided because of the reduced need to site new energy generation and disposal facilities. All of these impacts are mitigated to the extent efficiency displaces supply.
• Local economic development: Efficiency investments are highly labor intensive and typically employ labor that is available locally. The materials required for large-scale efficiency programs also can often be produced locally.
• Energy independence: Recent events in the Persian Gulf have again emphasized the importance of this factor. In addition, energy independence would avoid the domestic economic cost of price shocks such as those that occurred during the 1973 OPEC embargo.
Research and Development Needs
Existing technology is capable of producing major efficiency gains. However, it is apparent that large additional savings could be obtained by perfecting and introducing experimental technologies, backed by further research. The government should consider substantially increasing research and development funding, particularly for research designed to overcome engineering
barriers that inhibit the commercial availability of promising new technologies.
Specific research activities identified by the National Research Council's Alternative Energy Research and Development Committee (1990) include the following:
• develop advanced insulation materials for building walls, windows, and roofs;
• develop nongreenhouse-gas foams and evacuated-panel technology;
• develop controls, expert systems, diagnostics, and feedback systems to minimize energy use in the construction, commissioning, and operation of buildings; and
• implement existing technologies with carefully planned and monitored demonstrations and research on energy-related motivation and decision making.
For most of the 1980s the federal government, through DOE, played only a limited role in supporting research and development of energy-efficient technologies and approaches. Of the $2.8 billion national energy technology research and development budget in 1988, 9 percent was devoted to energy efficiency, and 53 percent to more capital-intensive fossil fuel, fusion, and nuclear research (Hirst, 1989b). Between 1974 and 1988, DOE spent $4 billion on energy efficiency research and development, whereas between 1954 and 1968, the federal Atomic Energy Commission spent $22 billion on nuclear reactor research and development (Hirst, 1989b; Hirst and Brown, 1990). It is important to recognize, however, that different types of energy require different levels of capital investment.
In addition, more information is needed on the effectiveness of different energy efficiency policy measures. Here, also, the federal government has greatly restricted its activities and support. Yet one of the major barriers to the implementation of comprehensive electricity efficiency programs is lack of knowledge about their design, implementation, and effectiveness.
Policies designed to substitute broad-based, comprehensive energy efficiency programs for large-scale central generation of power and use of fossil fuels serve two goals: reduction of greenhouse gases, particularly CO2, and economic efficiency. Overall, the means chosen to overcome the substantial market barriers that inhibit realization of these goals depend on considerations of policy and political reality. Nonetheless, one policy option holds considerable merit: regulatory reform designed to give utilities an incentive to conserve energy.
Specific conclusions include the following:11
• If all technically feasible electricity efficiency measures were applied to building end uses in the commercial and residential sectors, U.S. carbon emissions from the generation of electricity could be reduced by nearly half, to about 500 Mt CO2/yr. This reduction could be achieved at an average cost of -$57/t CO2.
• Electricity efficiency measures applied to commercial and residential buildings in the United States currently have the potential to save about 50 percent of the electricity used by this sector. More than half of these savings can be achieved at a cost of 2.5 cents/kWh or less, and all of the savings can be obtained at negative "avoided" costthat is, for less than 7.5 cents/kWh, which is the average price of U.S. electricity supplied to the buildings sector. The average net cost of these savings is -5 cents/kWh.
• The technology to realize these reductions is either commercially available or has been developed and tested. However, market imperfections and in some cases consumer resistance greatly impede the implementation of efficiency measures and, consequently, the realization of more than a fraction of the potential monetary and environmental savings. Specifically, commercial and residential electricity users demand short-payback periods for their investments in efficiency measurestypically no more than 2 years. However, electric utilities accept payback periods that are considerably longer.
• Through regulatory reform, particularly at the state level, government can provide utilities with a strong incentive to develop effective, broad-based energy efficiency programs. This can be done by ensuring, through the rate-making system, that purchase by a utility of all cost-effective energy efficiency from its customers represents the most financially attractive option.
• Other policy options that attempt to overcome market barriers and realize available cost-effective savings include direct governmental programs, governmental subsidies for efficiency investment, appliance efficiency standards, more stringent building codes, and revenue-neutral tax measures such as variable hookup fees for buildings.
• In addition to electricity savings of 500 Mt CO2, a combination of fossil fuel efficiency programs and fuel switching from electricity to natural gas or fuel oil could produce further savings of 374 Mt CO2/yr at a cost of -70/t CO2 equivalent for fuel savings and -$92/t CO2 equivalent for fuel switching. These savings, summarized on Table 21.7, could be brought about through the same policy options applicable to electric utilities. Additional research is necessary to realize the full scope of the savings that may be available.
To summarize, the total potential savings from this combination of electricity and fuel efficiency measured in the commercial and residential sector is 890 Mt CO2/yr at an average cost of -$63/t CO2. This chapter has illustrated the policy options and research needed to achieve these savings.
1. One exajoule (1018 joules of primary energy) equals 1/1.054 quadrillion (1015) Btu which also equals 85 BkWh of electricity. One exajoule (EJ) or 1 quadrillion Btu is often referred to as 1 quad.
2. Avoided cost or avoided price of electricity is the cost (usually expressed as an average or marginal cost in cents per kilowatt-hour) of the electricity rendered unnecessary by implementation of one or more energy efficiency measures.
3. It should be noted that the base load capacity represented by this price is coal-fired, the most damaging from an environmental standpoint. If environmental externalities were to be internalized, the price could more than double.
4. Throughout this report, tons (t) are metric; 1 Mt = 1 megaton = 1 million tons; and 1 Gt = 1 gigaton = 1 billion tons.
5. A natural question is whether lighter surfaces are a significant disadvantage in winter. In fact, they make relatively little difference in the temperature because daily solar radiation is much reduced. Thus on a clear December day in New York, solar gain is only 25 percent of its June daily value, and cloudier average weather reduces this by one-fourth to one-eighth. There is indeed the inconvenience that on a clear winter day in New York, thin patches of ice melt more slowly on a lighter-colored roadway, but this is more than offset by the summer reduction of smog. Dark surfaces contribute about two-thirds of summer heat islands, which in turn cook smog faster. In Los Angeles, the heat island is responsible for about one-third of the smog episodes.
6. See Table 21.2 for similar data, developed by Rosenfeld et al. (1991).
7. This is based on the assumption that natural gas contains 14.5 kg C/MBtu and that oil contains 20.3 kg C/MBtu (Edmonds et al., 1989).
8. It is estimated that if 33 percent of its hot water heating customers and 80 percent of its space heating customers were to convert to alternative, on-site fuels (oil, natural gas, and propane), Central Vermont Public Service, Vermont's largest utility (410-MW total system capacity in 1989), would be required to generate 3,000,000 MWh fewer over a 20-year period, an annual savings of 150,000 MWh (5.2 percent of total generation) (A. Shapiro, Vermont Energy Investment Corporation, Burlington, Vermont, memorandum, September 12, 1990).
9. In New England, fuel switching measures tend to displace electricity generated by oil, so fuel security is an important consideration.
10. Such efforts must also include correction of major market imperfections and other barriers to efficiency. For example, in India, a compact fluorescent lamp subject to import fees would retail for $35; thus CFLs are virtually unavailable there. Nonetheless, CFL plants are about 100 times less expensive than the power plants they replace. Data developed as part of the BELLE (Bombay Efficiency Lighting Large-scale Experiment)a collaboration between the U.S. Agency for International Development (AID), Lawrence Berkeley Laboratory, and the Bombay utilityshow that an Indian CFL plant, which would cost $7.5 million to build, could be expected to produce about 2 million 16-W CFLs per year and after 6 years to save 1000 MW of capacity and avoid about 1 BkWh/yrworth about $100 million per year (enough to purchase another CFL plant every month) (Gadgil and Rosenfeld, 1990).
A second example involves coal in China, which (like electricity in many less-developed countries) is heavily subsidized by the government. However, building insulation is not. As a result, new homes in Pekinga city with a mean temperature lower than Boston'sare not insulated. Nonetheless, insulation measures with a payback period of 6 years could be installed at a cost of conserved coal of 50 cents/MBtu, 66 percent lower than the $1.50/MBtu price of coal on international markets (Huang et al., 1984).
11. All calculations use a 6 percent discount rate.
A&C Enercom, Association of California Water Agencies, California Department of General Services, California Energy Coalition, California Energy Commission, California Large Energy Consumers Association, California/Nevada Community Action Association, California Public Utilities Commission Division of Ratepayer Advocates, Independent Energy Producers Association, Natural Resources Defense Council, Pacific Gas and Electric Company, San Diego Gas and electric Company, Southern California Edison Company, Southern California Gas Company, and Toward Utility Rate Normalization. 1990. An Energy Efficiency Blueprint for California: Report of the Statewide Collaborative Process. Available from California Public Utilities Commission, San Francisco, Calif.
Akbari, H., J. Huang, P. Martien, L. Rainer, A. Rosenfeld, and H. Taha. 1988. The impact of summer heat islands on cooling energy consumption and global CO2 concentration. In Proceedings of the ACEEE 1988 Summer Study on Energy Efficiency in Buildings, 5:11023. Washington, D.C.: American Council for an Energy-Efficient Economy.
Akbari, H., K. Garbesi, and P. Martien. 1989. Controlling Summer Heat Islands: Proceedings of the Workshop on Saving Energy and Reducing Atmospheric Pollution by Controlling Summer Heat Islands. Berkeley, Calif.: Lawrence Berkeley Laboratory.
Akbari, H., A. Rosenfeld, and H. Taha. 1990. Summer heat islands, urban trees, and white surfaces. ASHRAE Transactions: 90-24-1: January.
American Council for an Energy-Efficient Economy (ACEEE). 1986. Residential Conservation Power Plant Study, Phase I, Technical Potential. Report prepared for Pacific Gas and Electric. Washington, D.C.: American Council for an Energy-Efficient Economy.
American Council for an Energy-Efficient Economy (ACEEE). 1989. The Potential for Electricity Conservation in New York State. Final Report prepared for New York State Energy Research and Development Authority et al. Energy Authority Report No. 89-12. Washington, D.C.: American Council for an Energy-Efficient Economy.
Anderson, K., N. Benner, and E. Copeland. 1988. The energy edge project: Energy efficiency in new commercial buildings. Paper presented at Solar Energy Division Conference, American Society of Mechanical Engineers, Denver, April 10–14, 1988.
Banwell, P., C. Wake, and R. Harris. 1990. Trace Gas Emissions from Electric Utilities in New England: Potential Effects of Demand-Side Management. May
17, 1990. Durham: Institute for the Study of Earth, Oceans and Space, University of New Hampshire.
Barker, B. S., S. H. Galginaitis, E. Rosenthal, and Gikas International, Inc. 1986. Summary Report: Commercial Energy Management and Decision-making in the District of Columbia. Washington, D.C.: Potomac Electric Power Company.
Benner, N. 1988. Investigation into the pricing and ratemaking treatment to be afforded new electric generating facilities which are not qualifying facilities. Testimony before the Massachusetts Department of Public Utilities, Docket No. 86-36, May 2, 1988. Massachusetts Department of Public Utilities, Boston.
Bevington, R., and A. Rosenfeld. 1990. Energy for buildings and homes. Scientific American 263(3):76–86.
Bonneville Power Administration. 1990. Backgrounder. March.
Cambridge Energy Research Associates (CERA) and Arthur Andersen and Company. 1989. Electric Power Trends. Cambridge, Mass.: Cambridge Energy Research Associates.
Chernick, P. 1990. Proceeding to adopt an electrical energy plan for Commonwealth Edison Company. Testimony before the Illinois Commerce Commission, Docket No. 90-0038, May 25, 1990. Illinois Commerce Commission, Chicago.
Churchill, A., and R. Saunders. 1989. Financing of the Energy Sector in Developing Countries. World Bank Industry and Energy Department working paper, Energy Series Paper No. 14. Washington, D.C.: World Bank.
Cohen, A. 1990. ''Least-cost doing": The New England collaborative experience. In Proceedings of the 1990 ACEEE Summer Study on Energy Efficiency in Buildings. Washington, D.C.: American Council for an Energy-Efficient Economy.
Collette, C. 1989. Back east to the future. Northwest Energy News 8(5):18–22.
Collette, C. 1990. California re-enters the conservation challenge. Northwest Energy News 9(3):25–29.
Connecticut Light and Power Company (CL&P). 1990. Energy Alliance: Conservation and Load Management Programs Annual Report. Berlin, Conn.: Connecticut Light and Power Company.
Conservation Law Foundation, Inc. (CLF). 1990. Power by Efficiency: An Assessment of Improving Electrical Efficiency to Meet Jamaica's Power Needs. Boston, Mass.: Conservation Law Foundation, Inc.
DeCotis, P. 1989. Balancing shareholder and customer interests in incentive ratemaking. The Electricity Journal 2(10):16.
Destribats, A., J. Lowell, and D. White. 1990. Dispatches from the front: New concepts in integrated planning. Paper presented at EPRI Innovations in Pricing and Planning Conference, Milwaukee, Wis., May 3, 1990.
Edmonds, J., W. Ashton, H. Cheng, M. Steinberg. 1989. A Preliminary Analysis of U.S. CO2 Emissions Reduction Potential from Energy Conservation and the Substitution of Natural Gas for Coal in the Period to 2010. Report DOE/NBB-0085. Washington, D.C.: Office of Energy Research, U.S. Department of Energy.
Electric Power Research Institute (EPRI). 1990. Efficient Electricity Use: Estimates of Maximum Energy Savings. Final Report CU-6746. Research Project 2788. Palo Alto, Calif.: Electric Power Research Institute.
Energy Information Administration (EIA). 1987. Residential Energy Consumption Survey: Consumption and Expenditures: April 1984 through March 1985. Report
DOE/EIA-0321/1(84). Washington, D.C.: Energy Information Administration, U.S. Department of Energy.
Energy Information Administration (EIA). 1988. Energy Conservation Indicators: 1986. Report DOE/EIA-0441(86). Washington, D.C.: Energy Information Administration, U.S. Department of Energy.
Flavin, C. 1987a. Electrifying the third world. In State of the World, 1987, L. Brown, ed. New York: W. W. Norton.
Flavin, C. 1987b. Reassessing nuclear power. In State of the World, 1987, L. Brown, ed. New York: W. W. Norton.
Flavin, C. 1990. Yankee utilities learn to love efficiency. WorldWatch 3(2):5–6.
Gadgil, A., and A. Rosenfeld. 1990. Conserving Energy with Compact Fluorescent Lamps. Berkeley, Calif.: Center for Building Science, Lawrence Berkeley Laboratory.
Geller, H. 1986. Electricity Conservation Potential in Brazil. Washington, D.C.: American Council for an Energy-Efficient Economy.
Heron, A. 1985. Financing electric power in developing countries. IAEA Bulletin (Winter), No. 4, 27:44(6).
Hirst, E. 1987. Cooperation and Community Conservation. Final Report DOE/BP-11287-18. Portland, Oreg.: Hood River Conservation Project.
Hirst, E. 1989a. Electric-Utility Energy-Efficiency and Load-Management Programs: Resources for the 1990s. Contract No. DE-AC05-84OR21400. Oak Ridge, Tenn.: Oak Ridge National Laboratory.
Hirst, E. 1989b. Federal Roles to Realize National Energy-Efficiency Opportunities in the 1990s. Contract No. DE-AC05-84OR21400. Oak Ridge, Tenn.: Oak Ridge National Laboratory.
Hirst, E., and M. Brown. 1990. Closing the Efficiency Gap: Barriers to the Efficient Use of Energy. Contract No. DE-AC05-84OR21400. Oak Ridge, Tenn.: Oak Ridge National Laboratory.
Huang, Y., A. Rosenfeld, A. Canha de Piedade, and D. Tseng. 1984. Energy efficiency in Chinese apartment buildings: Parametric analysis with the DOE-2.1A computer program. Energy 9(11–12):979–994.
Investor Responsibility Research Center (IRRC). 1987. Generating Energy Alternatives at America's Electric Utilities. Washington, D.C.: Investor Responsibility Research Center.
Kahn, E. 1988. Electric Utility Planning and Regulation. Washington, D.C.: American Council for an Energy-Efficient Economy.
Keepin, W. 1988. Greenhouse warming: Efficient solution or nuclear nemesis? Testimony before House Subcommittee on Natural Resources, Agricultural Resources, and the Environment and Subcommittee on Science, Research and Technology. Snowmass, Colo.: Rocky Mountain Institute. June, 29, 1988.
Kempton, W. 1989. Cost-Effective Energy Conservation Feedback: Program Design and Evaluation of Behavioral Response, Volume II. Princeton University, Center for Energy and Environmental Studies. September.
Kempton, W., and L. Layne. 1989. The Consumer's Energy Information Environment. Princeton University, Center for Energy and Environmental Studies. November.
Kempton, W., and L. Montgomery. 1982. Folk Quantification of Energy. Energy 7(10):817–827.
Krause, F., J. Brown, D. Connell, P. DuPont, K. Greely, M. Meal, A. Meier, E. Mills, and B. Nordman. 1988. End-Use Studies, Volume III: Analysis of Michigan's Demand-Side Electricity Resources in the Residential Sector. Report LBL-23026. April. Berkeley, Calif.: Lawrence Berkeley Laboratory.
Lawrence Berkeley Laboratory (LBL). 1990. Compact Fluorescent Lamps. Energy Efficiency Note No. 2. Berkeley, Calif.: Center for Building Science, Lawrence Berkeley Laboratory.
Lee, G. 1989. Conservation: The Northwest's north slope. Northwest Energy News 8(4):9–12.
Lovins, A. 1977. Soft Energy Paths: Toward a Durable Peace. Washington, D.C.: Friends of the Earth.
Lovins, A. 1986. Advanced Electricity-Saving Technology and the South Texas Project. Snowmass, Colo.: Rocky Mountain Institute.
Lovins, A., and H. R. Heede. 1990. Electricity-Saving Office Equipment. Snowmass, Colo.: Rocky Mountain Institute.
Massachusetts Department of Public Utilities. 1990. Order in Docket No. 89-194/195, In re: Massachusetts Electric Company, Boston, March 30.
Meier, A., J. Wright, and A. Rosenfeld. 1983. Supplying Energy Through Greater Efficiency: The Potential for Conservation in California's Residential Sector. Berkeley, Calif.: University of California Press.
Miller, P., J. Eto, and H. Geller. 1989. The Potential for Electricity Conservation in New York State. Washington, D.C.: American Council for an Energy-Efficient Economy.
Moore, E., and G. Smith. 1990. Capital Expenditures for Electric Power in the Developing Countries in the 1990s. World Bank Industry and Energy Department working paper, Energy Series Paper No. 21. Washington, D.C.: Industry and Energy Department, World Bank.
Moskovitz, D. 1989. Profits and Progress Through Least-Cost Planning. Washington, D.C.: National Association of Regulatory Utility Commissioners.
Munasinghe, M., J. Gilling, and M. Mason. 1988. A Review of World Bank Lending for Electric Power. World Bank Industry and Energy Department working paper, Energy Series Paper No. 2. Washington, D.C.: Industry and Energy Department, World Bank.
National Association of Home Builders Research Foundation, Inc. 1985. Final Report on an Assessment of Energy Consumption in New Homes. Rockville, Md.: National Association of Home Builders Research Foundation, Inc.
National Association of Regulatory Utility Commissioners (NARUC). 1989. Resolution adopted by the annual meeting, Boston, November 15, 1988.
National Research Council. 1990. Confronting Climate Change: Strategies for Energy Research and Development. Washington, D.C.: National Academy Press.
New England Electric System (NEES). 1990a. Conservation and load management annual report. Filed with Massachusetts Department of Public Utilities, Docket No. 86-36, May 1, 1990. Massachusetts Department of Public Utilities, Boston.
New England Electric System (NEES). 1990b. 1990 Conservation and load management incentive summary. On file at the Conservation Law Foundation, Inc., Boston.
New England Electric System (NEES) and Conservation Law Foundation, Inc. 1989.
Power by Design: A New Approach to Investing in Energy Efficiency, Volumes I and II. Westboro, Mass.: NEES.
New England Energy Policy Council (NEEPC). 1987. Power to Spare: A Plan for Increasing New England's Competitiveness through Energy Efficiency. Boston: New England Energy Policy Council.
New Hampshire Public Utilities Commission. 1990. Generic investigation of financial incentives for conservation and load management. Order in Docket No. DE89-187, August 7, 1990. Concord: New Hampshire Public Utilities Commission.
Northwest Power Planning Council (NPPC). 1987. A Review of Conservation Costs and Benefits: Five Years of Experience Under the Northwest Power Act. Portland, Oreg.: Northwest Power Planning Council.
Northwest Power Planning Council (NPPC). 1989. Assessment of Regional Progress toward Conservation Capability Building. Issue Paper 89-8. Portland, Oreg.: Northwest Power Planning Council.
Pacific Northwest Laboratory. 1983. Recommendations for Energy Conservation Standards and Guidelines for New Commercial Buildings, Volume IV-C: Documentation of Test Results: Large Office Building, prepared for DOE under contract DE-AC06-76RLO 1830. Richland, Wash.: Pacific Northwest Laboratory.
Plunkett, J. 1988. Investigation into the pricing and ratemaking treatment to be afforded new electric generating facilities which are not qualifying facilities. Testimony before the Massachusetts Department of Public Utilities, Docket No. 86-36, May 4, 1988. Massachusetts Department of Public Utilities, Boston.
Plunkett, J., and P. Chernick. 1988. The role of revenue losses in evaluating demand-side resources: An economic re-appraisal. In the Proceedings of the 1988 ACEEE Summer Study on Energy Efficiency in Buildings. Washington, D.C.: American Council for an Energy-Efficient Economy.
Putnam, Hayes, and Bartlett, Inc. 1987. Supporting documents on conservation and load management. Prepared for the Boston Edison Review Panel. March. Cambridge, Mass.
Rhode Island Public Utilities Commission. 1990. In re: Narragansett Electric Company conservation and load management adjustment provision. Report and Order in Docket No. 1939, May 16, 1990. Rhode Island Public Utilities Commission, Providence.
Roe, D. 1984. Dynamos and Virgins. New York: Random House.
Rosenfeld, A. 1988. Energy efficiency versus "draining America." Testimony before Subcommittee on Fisheries and Wildlife Conservation and the Environment, U.S. House of Representatives, Oversight Hearing on Oil Development in ANWR and National Energy Policy, March 31, 1988. Washington, D.C.
Rosenfeld, A., C. Atkinson, J. Koomey, A. Meier, R. Mowris, and L. Price. 1991. A Compilation of Supply Curves of Conserved Energy. LBL #31700. Berkeley, Calif.: Center for Building Science, Lawrence Berkeley Laboratory.
Russell, D. 1989. The power brokers. The Amicus Journal (Winter):31–35.
Solar Energy Research Institute (SERI). 1981. A New Prosperity: Building a Sustainable Energy Future. Andover, Mass.: Brickhouse Publishing.
U.S. Agency for International Development (U.S. AID). 1988. Power Shortages in
Developing Countries: Magnitude, Impacts, Solutions, and the Role of the Private Sector. A Report to Congress. Washington, D.C.: U.S. Agency for International Development.
U.S. Agency for International Development (U.S. AID). 1990. Greenhouse Gas Emissions and the Developing Countries: Strategic Options and the U.S. A.I.D. Response. A Report to Congress. Washington, D.C.: U.S. Agency for International Development.
U.S. Department of Energy (DOE). 1989a. Analysis and Technology Transfer Annual Report, 1988. Buildings and Community Systems. Report DOE/CH00016-H2. Washington, D.C.: U.S. Department of Energy.
U.S. Department of Energy (DOE). 1989a. Analysis and Technology Transfer Annual Report, 1988. Buildings and Community Systems. Report DOE/CH00016-H2. Washington, D.C.: U.S. Department of Energy.
U.S. Department of Energy (DOE). 1989b. A Compendium of Options for Government Policy to Encourage Private Sector Responses to Potential Climate Change. Report DOE/EH-0103. Washington, D.C.: U.S. Department of Energy.
U.S. Department of Energy (DOE). 1989c. Monthly Energy Review. Report DOE/ EIA-0035(89/12). Washington, D.C.: Energy Information Administration, U.S. Department of Energy.
U.S. Department of Energy (DOE). 1989d. State Energy and Price Expenditure Report 1987. Report DOE/EIA-0376(87). Washington, D.C.: Energy Information Administration, U.S. Department of Energy.
U.S. Department of Energy (DOE). 1989e. Technical Support Document: Energy Conservation Standards for Consumer Products: Refrigerators and Furnaces. Report DOE/CE-2077. Washington, D.C.: U.S. Department of Energy.
U.S. Department of Energy (DOE). 1989f. State Energy Data Report: Consumption Estimates 1960–1987. Report DOE/EIA-0214(87). Washington, D.C.: Energy Information Administration, U.S. Department of Energy. April.
U.S. Department of Energy (DOE). 1989g. Energy Conservation Trends: Understanding the Factors That Affect Conservation Gains in the U.S. Economy. Report DOE/PE-0092. Washington, D.C.: U.S. Department of Energy.
Usibelli, A., B. Gardiner, W. Luhren, and A. Meier. 1983. A Residential Conservation Database for the Pacific Northwest. Berkeley: University of California at Berkeley and Buildings Energy Data Group for Bonneville Power Administration, Lawrence Berkeley Laboratory.
Vermont Public Service Board. 1991. Investigation into least-cost investments, energy efficiency conservation and management of demand for energy. Order in Docket No. 5270-CV-1, Order entered March 19, 1991, Vermont Public Service Board, Montpelier.
Wald, M. 1988. Utility sets plan to cut power use. The New York Times, May 26:D1.
Wiel, S. 1989. Making electric efficiency profitable. Public Utilities Fortnightly. July 6.
World Bank. 1985. China: The Energy Sector. Washington, D.C.: World Bank.