27 Jul Energy efficiency is no longer the Rodney Dangerfield of energy
Wisconsin’s Case for Combining Efficiency and Renewables into an Energy Portfolio
Energy Efficiency is finally being recognized as an important component to America’ energy future. In particular, states like Pennsylvania have begun discussion about including Energy Efficiency into what many states call renewable portfolios and Renewable Portfolio Standards (RPS). The whole idea being that combining Energy Efficiency and Renewable will allow the practicality of Energy Efficiency to enhance the economic viability of a program, which still depends on tax breaks and state subsidy. Pennsylvania’s Katie McGinty calls their proposed plan an “Advanced Energy Technology Portfolio.”
This discussion is particularly important, because the Governor’s Taskforce on Energy Efficiency and Renewable Energy has just completed their recommendations to the Governor. As a state known for its environmental leadership, it is appropriate that Wisconsin should consider including a version of the Advanced Energy Technology Portfolio platform.
After all, Wisconsin has already given Energy Efficiency and Renewables– in that order–priority over other new sources of energy in Wis. Statute § 1.12 (4), which is better known as the Energy Priority Statute.
Semantics is the first problem with any thoughtful energy discourse. When discussing energy issues, one cannot help notice how many semantic mine fields there are. You have such terms as “green,” “renewable,” “sustainable,” “conservation,” “energy efficiency,” “alternative energy,” “efficiency utility,” “emission reduction,” “portfolio standards,” “renewable portfolio standard,” “base load reduction,” “new generation resource,” “negawatts,” “virtual power plant” and many other catchy and oft-times poetic phrases. It is enough to confuse even the most battle hardened energy veteran.
As a precept for discussing the Advanced Energy Technology Portfolio, I would like to suggest that conservation and energy efficiency are green, renewable, and sustainable, especially if one includes in each of their definition the fact that they do not deplete natural resources, they can be consistently implemented over a long period of time and they have a positive environmental impact.
Given the fact that conservation has acquired a slightly simplistic meaning, which includes turning the thermostat down and wearing a heavy sweater, most informed energy people prefer to use the phrase Energy Efficiency, because it implies the most efficient use of energy without any compromises required. In other words, Energy Efficiency is the art of getting more while using less.
Therefore, I would like to define Energy Efficiency as “the quickest, cleanest and cheapest source of new energy,” which means it should be accorded at least the same respect and consideration that Renewables receive today. In fact, the American Council for an Energy Efficient Economy (ACEEE)has done a study recently, entitled “The Technical, Economic and Achievable Potential for Energy Efficiency in the United States: A Meta-Analysis of Recent Studies,” that shows as much as a 24% reduction of all electricity usage could be achieved in the U.S., which means that as much as one hundred thousand Megawatts of savings is possible.
This portfolio would include Energy Efficiency and Renewable Energy under one portfolio standard. Ms. McGinty expects the state of Pennsylvania to derive a full 10% of future energy requirements by completing the Advance Energy Technology Portfolio. The fact is that utilities and state regulators need to be able to treat Energy Efficiency as a supply side option, with an allowable return on investment. If given a return on energy efficiency competitive to the one they are given now for energy supply and production, utilities will be able to justify to their shareowners their investments to reduce demand and make energy efficiency a growing part of their business platform. In the case of the California energy crisis, the state was able to reduce demand by 5% within the first year of the crisis, with as much as a reduction of 10% in overall electrical consumption possible for California over the next decade. New evidence is emerging that California could cost-effectively reduce its electricity needs by at least 5,900 MW–the equivalent of 12 large power plants– over the next decade. It has been estimated that the net benefits to California would be $12 billion and the environmental benefit is equally as large. Imagine the economic and environmental benefits of Energy Efficiency nationally if we coordinate efforts throughout the U.S.
Ultimately, if we are able to agree on the semantics of energy and a broad based approach to energy solutions, the U.S. can start the process of reducing dependence of foreign oil and construction of new power plants. By creating incentives to maximize Energy Efficiencies, we will send the right signal to the global marketplace. Katie McGinty, said it best when she said, “My philosophy has always been and continues to be that environmental challenges properly understood and approached are economic opportunities.”
With the establishment of an Advanced Energy Technology Portfolio like Pennsylvania’s, the U.S. can unleash the innovative powers of American industry both as users and inventors, which will then unleash the power of job creation, cost competitiveness and environmental stewardship.
By motivating utilities, businesses and individuals to benefit from Energy Efficiency, we will have a 21st Century solution to the vexing problems involving energy, economic and environmental issues.
Stephen Heins is Vice President of Corporate Communication at Orion Energy Systems. He can be contacted at
The opinions expressed herein or statements made in the above column are solely those of the author, & do not necessarily reflect the views of the Wisconsin Technology Network, LLC. (WTN). WTN, LLC accepts no legal liability or responsibility for any claims made or opinions expressed herein.