Energy Efficiency 101
Energy efficiency means using energy wisely
Simply put, energy efficiency means using each unit of energy as efficiently as possible to reduce waste. A common example of energy efficiency is switching from incandescent light bulbs to light emitting diodes – more commonly known as LED – light bulbs. LED bulbs produce a nearly identical amount of light as incandescent bulbs, but last for around 100,000 hours or roughly 15 years – a significant upgrade compared to the 2,000 hour average of normal incandescent bulbs. Weatherization upgrades, such as installing double- or triple-pane windows and insulating buildings to preserve indoor heat, are another example of energy efficiency. It is important to note that energy efficiency is different from renewable energy, which is energy generated from renewable sources that are naturally replenished, such as sunlight, wind, and geothermal heat. Renewable energy generates clean electricity, while energy efficiency helps us use that clean electricity with as little waste as possible. Energy efficiency is a key part of what the NW Energy Coalition refers to as the Harmonious Grid, a concept that represents the ideal, controllable energy system that melds supply side and customer side resources (such as energy efficiency, demand response, and rooftop solar).
Energy efficiency reduces carbon pollution, helps utilities and lower-income customers, and creates jobs
Energy efficiency is an important tool to reduce carbon pollution. States in the Northwest have established aggressive decarbonization goals and energy efficiency will play a key role in meeting them. There are many energy efficient tools at our disposal, such as energy efficient appliances, weatherization programs, and energy codes to create buildings that use less energy to heat, cool, and operate.
Energy efficiency can also help utilities. Many energy efficiency programs across the Northwest are run by, or in conjunction with, utilities. Utilities earn revenue by charging customers for the amount of energy they consume. So, a utility encouraging its customers to use less energy, thereby reducing their monthly bills, might seem counterintuitive at first. But energy efficiency measures have benefits for both customers and utilities. Often, using energy efficiently is the cheapest and quickest way to ensure resource adequacy (the ability of a utility’s electricity supply to meet demand), and in many states, utilities are required to invest in energy efficiency. Energy efficiency can also help utilities reduce peak demand – short periods of very high electricity usage by customers – which makes it easier to provide reliable service to customers.
Energy efficiency has the added benefit of lowering utility customer bills. Lower income customers, especially, can receive substantial decreases in their utility bills from energy efficiency upgrades, such as installing a heat pump or insulating their building. Many weatherization or efficiency programs are targeted to low-income customers for this reason, but much more can and should be done.
Finally, energy efficiency helps stimulate the economy by creating new job opportunities. Installing energy efficiency upgrades requires labor and employs a range of professional and skilled labor positions. Studies in Oregon, Washington, and across the US have demonstrated that energy efficiency is the single largest contributor to the green employment workspace. In the Northwest alone, over 100,000 people are employed working with energy efficiency.
Energy efficiency has played and will continue to play an important role in the Northwest
Energy efficiency has played an important role in the Northwest electric system for decades. As of 2019, the Northwest has saved more than 7,200 aMW since 1978, the equivalent of about five Seattle-sized cities. After hydroelectricity, energy efficiency is our region’s second largest energy resource, avoiding more than 22.2 million metric tons of carbon pollution. That is the equivalent of 4.78 million gasoline-powered cars on the road for one year and has reduced consumers’ bills by about $4 billion per year.
Because of our region’s impressive energy efficiency history, our per capita energy use is much lower than the US average and decreasing at a quicker rate than the US average.
However, electricity demand in the Northwest is expected to increase. The Northwest’s population is increasing while we are simultaneously electrifying more of our transportation and buildings. These factors mean demand for electricity will grow quickly in the coming decades – up to about 25% growth across the region over the next 20 years, according to the Northwest Power and Conservation Council. At a more local level, Seattle City Light (SCL), which provides electricity to Seattle and some surrounding cities, expects 2-5% average load growth every year for the next 20 years.
Renewable energy development in the Northwest is skyrocketing in order to decarbonize our grid, replace the power from several retiring coal plants, and meet this future demand. However, we will need more tools to meet expected electricity demand than only building fields of solar panels and wind turbines.
Meeting increased electricity demand will require our region to implement energy efficiency measures in order to use our current and future electricity supply more efficiently, while simultaneously developing renewable energy resources. Solar and wind energy are being rapidly built out across the region but both resources are intermittent sources of energy. Energy efficiency can help extend intermittent energy sources by allowing each watt of solar and wind to be consumed more efficiently, meaning less energy generating resources need to be built. Reducing the number of resources that need to be built is key, as siting challenges escalate each year.
The Northwest Power and Conservation Council recommends that the Northwest region acquire between 750 and 1,000 average megawatts of energy efficiency by the end of 2027 and at least 2,400 average megawatts by the end of 2041. In order to achieve this target, the Council states that all utilities within the region will need to deliver energy efficiency to their end-use customers. The Council also strongly recommends the continued investment in the Northwest Energy Efficiency Alliance (NEEA). NEEA is an alliance of more than 140 Northwestern utilities and energy efficiency organizations working with over 13 million energy customers. NEEA identifies and removes barriers within the supply chain to help drive and encourage permanent change. The continued support of NEEA is critical to moving towards a more energy efficient system.
The build out of energy efficiency plays an important role as we strive towards the Harmonious Grid, a concept the NW Energy Coalition developed to represent the ideal, controllable electrical grid. Implementing energy efficiency alongside other customer-side resources, and melding those resources with supply side resources, will allow utilities the ability to manage and control the demand for electricity to a large extent.
Legislatures, regulators, and utilities will drive the adoption of energy efficiency
Here in the Northwest, we have a long and strong history of energy efficiency. We must continue to encourage energy efficiency as the priority resource as we battle climate change and build a changing energy grid. There are several ways our region can drive the adoption of energy efficiency.
State governments can pass laws and provide funding to encourage and fund energy efficiency programs. For example, in response to the heat dome event in Oregon in 2021 during which at least 100 people died, the Oregon Legislature passed SB 1536. The bill directed the OR Department of Energy (ODOE) to create a $10 million heat pump deployment program and a $15 million grant program for landlords to install heat pumps. Heat pumps are much more efficient at cooling spaces than air conditioning. Due to SB 1536, ODOE has teamed up with Energy Trust of Oregon, providing $2 million in grants for a Community Cooling Center program for extreme heat events.
States, municipalities, and jurisdictions of all sizes can also pass laws to help industries deploy energy efficient measures. For example, Washington’s 2019 Clean Buildings Act tackles a tricky industry: existing commercial buildings where owners and tenants may have different incentives to act on energy efficiency measures. The Clean Buildings Act, which sets energy performance standards for commercial buildings larger than 50,000 square feet, encourages owners to use energy efficiency measures to meet these standards. At the county level, in 2021, King County authorized the Commercial Property Assessed Clean Energy and Resiliency (C-PACER) program, which is designed to help buildings of all kinds become more efficient and resilient. C-PACER does not use any government funding; it is a loan agreement between a private lender and the property owner that indicates that the improvement is in the public interest, allowing for more attractive loan terms. Buildings account for more than a quarter of Washington’s carbon pollution, and have only increased in their proportion of our overall emissions in recent decades. Focusing on reducing building energy consumption is now more important than ever.
Utilities play the most important role in encouraging adoption of energy efficiency measures. About 60% of our region’s energy efficiency savings since 1978 have come from utility programs. As pointed out in the Northwest Power and Conservation Council’s Seventh Power Plan Midterm Assessment, when utility “programs invest more in acquiring energy efficiency, they tend to achieve greater savings.” An example is Snohomish County Public Utility District’s energy efficiency and conservation program, which covers everything from weatherization and heating to providing rebates for energy efficient appliances for both commercial and residential applications. SCL, which provides electricity to the around 3.5 million people in the Seattle area, reported net electricity savings of up to 131,858 MWh in 2018 and 1.38 million total MWh saved since they began energy efficiency programs in 1977.
Check out the video below to hear about some of SCL’s energy efficiency programs and how efficiency impacts decarbonization from a utility perspective.
Another powerful way to increase energy efficiency is through energy codes. States and local jurisdictions develop and update energy codes for commercial and residential buildings and can encourage, or even require, certain energy efficient measures in new buildings. For example, Montana recently adopted the 2021 Edition of the International Energy Conservation Code, which will improve building energy efficiency and save consumers money.
Thank you to Lucas Ringer, our intern who researched and wrote the first draft of this blog.