Saving energy and saving the climate are not the same thing.
A couple years ago I took Severin’s advice and proactively replaced many of my still-working incandescent light bulbs with energy efficient LEDs. Now when I flip a light switch, I enjoy knowing that somewhere in the western US, a power plant is burning a little less natural gas or coal.
For decades, energy efficiency has been a tried-and-true way to help the environment. Electricity is generated by power plants that pollute the air and damage the climate. Using less electricity has meant reducing these upstream harms.
But the simple link between electricity consumption and environmental harms is changing. Wind and solar produce a growing share of electricity and coal is declining. This means producing a megawatt-hour of electricity isn’t as harmful to the environment as it once was. As energy production gets greener, my LED bulbs are incrementally less helpful. At some times of year I may even be causing a wind or solar power plant to be cut back!
Regulators in California are seizing the opportunity presented by renewable electricity to reorient energy efficiency policy away from saving energy just for the sake of saving energy, and instead focusing on climate change.
Is Renewable Energy Still Energy?
A decision just adopted by the California Public Utilities Commission (CPUC) allows utilities to use energy efficiency programs to encourage households and businesses to switch from natural gas to electricity. This change could open up new incentives for fuel switching to the seven to eight million California households that have natural gas-fueled space and water heating. Thousands of California businesses could get involved too.
Up to this point these types of programs have been prohibited. California regulators didn’t want households to install electric resistance space and water heaters powered by a fossil-fuel-powered electric grid. These technologies can use two to three times as much fossil-fuel energy to produce the same amount of heat as natural gas burned directly in homes.
But times have really changed. The California grid is rapidly becoming cleaner – 33% renewables in 2020, continuing to 60% in 2030 and 100% zero carbon by 2045. Heat pumps are also gaining traction as an energy efficient alternative to electric resistance space and water heaters.
But, note, the motivation for this policy change is to cut greenhouse gas emissions, not to save energy. Renewable energy is still energy, even if it is carbon-free. Enter some creative redefinitions. The CPUC has declared that renewable energy has no energy content when calculating whether a program increases energy efficiency. This upsets the engineer in me, but is consistent with the underlying rationale for energy efficiency policy—addressing the harms of energy use.
More Opportunities to Redirect Policy
This new policy is just one step in a broader redirection of energy efficiency policy toward addressing greenhouse gas emissions. For example, the City of Berkeley and dozens of other California cities are starting to use building codes, a traditional energy efficiency tool, to electrify buildings in order to tackle climate change.
Many other opportunities can and should be deployed for this same purpose. Since wind and solar generation vary so much across days, weeks and seasons, the timing of energy savings is becoming much more important. To address this, energy efficiency policy could encourage consumers to buy more sensors and controls for their appliances. Then appliances like electric water heaters and refrigerators could be programmed to draw more electricity when renewable power is abundant. The technologies to achieve this are being developed, but are not widely available in the market. The financial rationale for consumers to move this way is also lacking. A policy push would help.
Another major opportunity exists with retooling of the ENERGY STAR standards. Today a product earns an ENERGY STAR label based on energy savings. If the certification were based instead on greenhouse gas emissions, the results could be different. For one, the certification would vary by region to reflect the dramatic variability of the carbon content of local electricity supplies. The rules could also require that appliances have the ability to respond to the carbon intensity of electricity.
The electric grid is changing. It’s time to explicitly and intentionally start redirecting energy efficiency policy to focus on the climate. And if “energy efficiency” becomes less about saving energy then maybe it needs a new name. Ideas?
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Suggested citation: Campbell, Andrew. “Redirecting Energy Efficiency Policies for the Climate”, Energy Institute Blog, UC Berkeley, August 5, 2019, https://energyathaas.wordpress.com/2019/08/05/redirecting-energy-efficiency-policies-for-the-climate/
Andrew Campbell is the Executive Director of the Energy Institute at Haas. Andy has worked in the energy industry for his entire professional career. Prior to coming to the University of California, Andy worked for energy efficiency and demand response company, Tendril, and grid management technology provider, Sentient Energy. He helped both companies navigate the complex energy regulatory environment and tailor their sales and marketing approaches to meet the utility industry’s needs. Previously, he was Senior Energy Advisor to Commissioner Rachelle Chong and Commissioner Nancy Ryan at the California Public Utilities Commission (CPUC). While at the CPUC Andy was the lead advisor in areas including demand response, rate design, grid modernization, and electric vehicles. Andy led successful efforts to develop and adopt policies on Smart Grid investment and data access, regulatory authority over electric vehicle charging, demand response, dynamic pricing for utilities and natural gas quality standards for liquefied natural gas. Andy has also worked in Citigroup’s Global Energy Group and as a reservoir engineer with ExxonMobil. Andy earned a Master in Public Policy from the Kennedy School of Government at Harvard University and bachelors degrees in chemical engineering and economics from Rice University.