Use Of Energy Efficiency Programs Lowers Cost Of Clean Power Plan Compliance, According To Recent Studies

Published on March 31st, 2016 | by

March 31st, 2016 by

Energy efficiency programs are generally the lowest-cost strategy for remaining in compliance with Clean Power Plan requirements — that’s the primary finding of a number of recent studies on the subject from a number of different organizations and research bodies.

Most of the states studied can actually achieve more than 50% of their emissions reductions targets through energy efficiency measures alone, according to the studies. The graph below — courtesy of the American Council for an Energy Efficient Economy’s (ACEEE) SUPR2 calculator — demonstrates these findings more clearly than words do, so you may as well just take a look below in order to understand the recent work.


The graph above relates to the implementation of 3 distinct energy efficiency policies in the 6 different states shown. The 3 energy efficiency policies in question are: a 1% per year energy savings target; revised building codes; and a “medium level of new combined heat and power systems”.

As one can see, in addition to emissions reductions, net savings for the states in question (when using the above-outlined energy efficiency policies) ranges from $1 billion by 2030 to $7 billion by the same date. These savings figures relate only to saved energy and don’t factor in the savings associated with reduced investment needs.

A new fact sheet from the ACEEE provides more:

Several recent studies have compared the cost of Clean Power Plan compliance with and without energy efficiency. These studies use different cost metrics and hence it is difficult to directly compare them. However, all of them come to the same conclusion: that energy efficiency can reduce compliance costs. For example, MJ Bradley and Associates analyzed the average national cost of an allowance for one ton of carbon emissions, comparing scenarios using current levels of efficiency with scenarios where efficiency savings are 1% or 2% of sales each year. The study found that greater efficiency means lower allowance prices. Perhaps even more important than the cost of allowances is the cost impact on customers’ bills. MJ Bradley found that if states use energy efficiency programs to total 2% savings per year, retail electric bills will be reduced by 17%.

Likewise, Synapse Energy Economics looked at possible compliance plans for each state and found that consumer energy bills would be $3–$24 lower per month if states ramped up energy efficiency savings to 3% per year by 2029 relative to likely state-by-state scenarios without energy efficiency (see above).


The overall takeaway of these findings should be pretty clear — compliance with the Clean Power Plan need not be excessively expensive, and can even be a boon if energy efficiency programs are used to meet the standards.

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