Comfortable conservation and global warming

November 27, 2009

kemp.jpg– John Kemp is a Reuters columnist. The views expressed are his own –

Energy efficiency will have to make the single most-important contribution if policymakers are serious about limiting greenhouse gas emissions and dampening growing demand for fossil fuels.

Energy efficiency will not remove the need to invest in large volumes of wind, solar and nuclear generation, or in technology for carbon capture and storage, but it does form the third leg of the triad.

In the United States, nowhere have efficiency initiatives been given higher prominence and become as deeply entrenched in the public policy process as in the state of California. In response to a series of power crises, the state has adopted some of the toughest standards anywhere in the world.

The 1974 Warren-Alquist Act, signed by then-governor Ronald Reagan, created the State Energy Resources Conservation and Development Commission, now renamed the California Energy Commission (CEC), with a mandate to develop minimum efficiency requirements for new construction and appliances.

Efficiency improvements have been enforced through a strict standard-setting process.

Title 24 of the state code of regulations prescribes detailed requirements for all new buildings and major redevelopments in the state. Title 20 establishes standards for appliances sold to in-state customers, including heating and cooling systems, lighting units and refrigerators. Both have been repeatedly tightened to require higher levels of efficiency.

The objective is to limit the need to build new generation and transmission capacity by cutting electricity consumption in heating and lighting applications.

Measuring the amount of generation and greenhouse emissions avoided this way is difficult since it involves a counterfactual — comparing the amount of energy actually used and the amount that would have been needed in the absence of conservation measures — which can never be known for certain.

But by any yardstick, the amount of generating capacity and greenhouse gas emissions avoided by these “negawatts” has been substantial.

THE ART OF ENERGY EFFICIENCY

Prior to 1974, California’s installed generating capacity was 30 Gigawatts (GW) and growing 6 percent per year, with more than half the annual increase required to supply new homes and buildings.

California Energy Commissioner Art Rosenfeld, one of the godfathers of the efficiency movement, claims Title 24 building standards cut energy use per square foot for heating and cooling in new buildings by 50 percent in the ten years between 1975 and 1985. A decade later savings had avoided the need to build 2.5 GW of new generation.

Rosenfeld claims even larger success for standards to improve domestic refrigerators. Progressively tighter state and federal regulations for new appliances, as well as improvements in technology, have cut annual energy consumption from an average of 1800 kilowatt hours (KWh) in 1974 to 450 kWh in 2001.

Consumption has been cut even as the typical refrigerator’s volume has grown 10 percent from 18 cubic feet to 20, making a compound efficiency gain of 5 percent per year.

Rosenfeld estimates the amount of energy saved, in California and now nationwide as standards have been adopted at federal level, is equivalent to around 50 GW of generating capacity (see the diagram on page 48 of Rosenfeld’s famous paper on “The Art of Energy Efficiency”.

CPUC ADOPTS AMBITIOUS TARGET

The drive to reduce power consumption has accelerated following the state’s devastating power crisis in 2000-2001.

“Energy efficiency is the first priority in California’s loading order for energy resources” (ahead of solar, wind, nuclear or fossil fuels) according to the California Public Utilities Commission (CPUC), which regulates electricity rates charged by investor-owned utilities (IOUs) in the state.

CPUC has now included energy efficiency objectives in its IOU rate-setting process. Utilities receive an increase in the rate charged per kilowatt hour in return for meeting certain load-reduction targets.

CPUC has adopted targets that would cut peak generation about 450-500 MW per year between 2006 and 2013. Assuming they are met, California’s four IOUs would avoid the need for around 4 GW of generating capacity by the end of 2013 (roughly four large nuclear or coal-fired plants)

For comparison, the Western Interconnection, of which California is the largest component, has around 178 GW of generating capacity at present, so the avoided capacity would be equivalent to around 2 percent of all generating capacity on the western power grid.
CASH FOR CLUNKERS, REDUX

California’s approach is now being adopted by the Obama administration (Energy Secretary Steven Chu is a self-described “energy efficiency nut”).

The administration has already run a cash-for-clunkers programme to provide a boost for automakers while giving customers an incentive to retire older, less efficient vehicles in favour of modern cars that achieve higher mileage per gallon.

But the American Recovery and Reinvestment Act also provides $296 million of funding for State Energy Efficiency Appliance Rebate Programs (SEEARP) — a cash-for-clunkers system to replace aging clothes washers, refrigerators and room air conditioners with more energy efficient versions.

California’s share is $35 million, and the state proposes to make rebates available for purchases made during a one-month period from March 17 and ending on April 22, 2010. Rebates will be offered for 125,000 washing machines, 150,000 refrigerators and 100,000 air conditioners.

“COMFORTABLE CONSERVATION”

Rosenfeld has calculated that the amount of energy used to produce a dollar of GDP fell by a factor of 4.5 between 1845 and 1998, after adjusting for inflation, a compound annual improvement of 1 percent, driven by market forces.

But the average concealed substantial variations. Conservation rose to as much as 4 percent per year following the first oil shock, until real oil prices fell in the late 1980s and through the 1990s, slowing the pace of improvement.

If the rate could be raised to 2 percent per year — double the long-term average but just half the rate achieved after the first oil shock — energy consumption per unit of output could be cut by two-thirds in just over 50 years.

“Comfortable conservation” (getting the same quality of heat, light and output for a fraction of the energy by reducing waste) is now the central objective for the coterie of physicists advising the White House, and is likely to be one of the central policy themes over the remaining years of the Obama administration.

Such gains are perfectly feasible. U.S. motor manufacturers achieved even larger improvements in engine efficiency in the early 1980s, though the gains were used to build larger and more powerful vehicles rather than reduce fuel consumption.

The real prize, however, is in the emerging markets, where most appliances and buildings still operate at just a fraction of the efficiency of their advanced-country counterparts, and where the scope for efficiency gains is huge.

In effect, the only way to continue raising living standards, especially in developing countries, while limiting emissions is to take the success achieved in California refrigerators and replicate it across all the other energy-consuming sectors on a worldwide scale.

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