U.S. Energy Efficiency Potential Through 2040

What’s Next for Energy Efficiency?

Growth of Energy Efficiency

Energy Efficiency took off in the early 1980’s when the industry was burdened by over investment in supply side technology and when wholesale markets began to create opportunities for more demand-side options, rate options and downstream customer-owned supply options. Today the main concern by regulators and policy makers is the environmental impacts power generation poses through carbon consumption, mining, and the waste products they produce. The momentum to create power an integrated gird that meets customer needs but at lower cost and reduced environmental impacts is accelerating. 

Technology improvements in solar cells, wind turbine efficiency, metering, data communication and on the customer side smart technologies, distributed energy resources, electric transportation, flexible loads, IoT, and price discovery combine to make energy efficiency and demand response an important pillar in meeting the demands of customers.  The attached illustration shows some of the strategies being considered to meet future energy objectives.  Current and future hyper-energy efficiency potential is the focus of this report.

Integrated Grid: Decarbonization and Grid Support Strategies

Of the four pillars shown above energy efficiency is an important component of achieving a flexible, decarbonized, and efficient integrated gird.  New inverter technology promises to create additional efficiency for all compressor-based loads – heat pumps for air conditioning and heating, water heating refrigeration.  Advanced communication technology promises to create connected appliances that when not needed can be used to support the reliability of the integrated grid, at much lower cost than lumpy supply or demand resources.  Data analytics to identify where efficiency potentials are just now emerging and advanced HVAC systems that produce improved levels of comfort are emerging.  The future new technology efficiency potential is unlimited. 

Wringing more value of the supply and demand chains will require new thinking and new technologies.  It will require new rate structures which reflect the underlying and varying costs conditions, both energy and capacity, for each delivery arm of power, generation, transmission, and distribution. It will require service designs that reflect the value to the consumer and the cost to the supplier, for instance demand response valuation depends upon who controls the equipment.  It will require customized contracting which reflects the characteristics of individuals rather than groups of customers.  It may require competition in some areas, sole suppliers in others, and the support of the local wires company. 

The report is one piece in the process that will help connect all the pieces needed to optimize the power system in the future and maximize its value to all participants.

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