By Henry Robertson
With the passage of Proposition C renewable energy is now law in Missouri. Next up is energy efficiency. The legislature took a few steps in this direction in 2008, like enacting Energy Star appliance efficiency standards. It’s time to think bigger.
We’d like to see statewide codes for energy efficiency in buildings. We’d like to see support for combined heat and power (CHP), which uses otherwise wasted heat from electricity generation and industrial processes to heat and cool buildings or generate more electricity.
A lot of individuals, including most readers of this newsletter, are reducing their carbon footprints. But individual efforts only go so far. Most people don’t know enough or care enough, or they look at the up-front cost of insulation or an Energy Star refrigerator and either won’t consider the long-term savings or can’t afford to.
Expanding energy efficiency is an enterprise that requires money and expertise. Many other states have turned for help to those companies we all know and love, our electric and gas utilities.
This sticks in the craw. Not even the oil companies are more fossil-fuel dependent than the utilities. I wish we could get all our electricity from rooftop solar and batteries, but we’re not there yet.
The electric companies in particular make more money only by selling us more juice, not less. They have a strong disincentive to help us save energy.The hope is that we can begin to transform the kind of companies the utilities are if we can change their incentives. We can’t slow climate change if we can’t make the utilities change.
Suppose we let the utilities stay profitable while selling us less energy. Our bills go down while their revenues stay the same or even improve. Everybody wins.
They advance the money to us in the form of free energy audits or rebates on appliances or insulation. We repay their investments through our bills plus something extra, like a percentage of the money we save. It’s only fair that they get a part of the savings if they made them possible. We and they both come out ahead.
The carrot of incentives could be accompanied by the stick of mandates. We could require that they spend a certain percentage of their revenues on energy efficiency programs. Or we could require them to reduce their energy sales over time—say by 0.5% in year 1 increasing to 2% per year by year 10.
Many studies look at energy efficiency potential— how much energy a state or other area can save with these kinds of programs. The technological potential for saving energy (what can be done with existing technology regardless of cost) is huge, close to 50%. The economic potential (what is both technologically and economically feasible) is almost as great. But achievable potential is far less. Achievable potential takes into account the barriers to doing efficiency. Prominent among them is customer resistance—sheer inertia and reluctance to change. A residential market efficiency report by the Midwest Energy Efficiency Alliance in 2005 found that the achievable potential for Missouri in the electric sector was only 12%.
There are early indications that this could be changing; that the steady rise in demand for electricity went into reverse even before the economic crisis hit. One possible reason is saturation of the market for electronic goods of all kinds. The Energy Information Administration just lowered its forecast for demand growth from 1.4% a year to 1.1%. Time will tell.
So the utilities claim, not without justice, that it’s not in their power to change human behavior. Even with the best will and incentives in the world, they can’t guarantee the results we’d like to see. It’s up to all of us.