Making homes, vehicles, and businesses more energy efficient is seen as a largely untapped solution to addressing the problems of pollution, global warming, energy security, and fossil fuel depletion. Many of these ideas have been discussed for years, since the 1973 oil crisis brought energy issues to the forefront. In the late 1970s, physicist Amory Lovins popularized the notion of a “soft energy path”, with a strong focus on energy efficiency. Among other things, Lovins popularized the notion of megawatts—the idea of meeting energy needs by increasing efficiency instead of increasing energy production.
Energy efficiency has proved to be a cost-effective strategy for building economies without necessarily growing energy consumption, as environmental business strategist Joel Makower has noted. For example, the state of California began implementing energy-efficiency measures in the mid-1970s, including building code and appliance standards with strict efficiency requirements. During the following years, California’s energy consumption has remained approximately flat on a per capita basis while national U.S. consumption doubled. As part of its strategy, California implemented a “loading order” for new energy resources that puts energy efficiency first, renewable electricity supplies second, and new fossil-fired power plants last.
Lovins’ Rocky Mountain Institute points out that in industrial settings, “there are abundant opportunities to save 70% to 90% of the energy and cost for lighting, fan, and pump systems; 50% for electric motors; and 60% in areas such as heating, cooling, office equipment, and appliances.” In general, up to 75% of the electricity used in the U.S. today could be saved with efficiency measures that cost less than the electricity itself. The same holds true for home-owners, leaky ducts have remained an invisible energy culprit for years. In fact, researchers at the US Department of Energy and their consortium, Residential Energy Efficient Distribution Systems (REEDS) have found that duct efficiency may be as low as 50-70%. The US Department of Energy has stated that there is potential for energy saving in the magnitude of 90 Billion kWh by increasing home energy efficiency. One way to combat duct inefficiency is by getting an AC tune-up.
Other studies have emphasized this. A report published in 2006 by the McKinsey Global Institute, asserted that “there are sufficient economically viable opportunities for energy-productivity improvements that could keep global energy-demand growth at less than 1 percent per annum”—less than half of the 2.2 percent average growth anticipated through 2020 in a business-as-usual scenario. Energy productivity, which measures the output and quality of goods and services per unit of energy input, can come from either reducing the amount of energy required to produce something, or from increasing the quantity or quality of goods and services from the same amount of energy.
The Vienna Climate Change Talks 2007 Report, under the auspices of the United Nations Framework Convention on Climate Change (UNFCCC), clearly shows “that energy efficiency can achieve real emission reductions at low cost.” Modern energy-efficient appliances, such as refrigerators, freezers, ovens, stoves, dishwashers, and clothes washers and dryers, use significantly less energy than older appliances. Current energy efficient refrigerators, for example, use 40 percent less energy than conventional models did in 2001. Following this, if all households in Europe changed their more than ten year old appliances into new ones, 20 billion kWh of electricity would be saved annually, hence reducing CO2 emissions by almost 18 billion kg. In the US, the corresponding figures would be 17 billion kWh of electricity and 27,000,000,000 lb (1.2×1010 kg) CO2. According to a 2009 study from McKinsey & Company the replacement of old appliances is one of the most efficient global measures to reduce emissions of greenhouse gases. Modern power management systems also reduce energy usage by idle appliances by turning them off or putting them into a low-energy mode after a certain time. Many countries identify energy-efficient appliances using energy input labeling.
The impact of energy efficiency on peak demand depends on when the appliance is used. For example, an air conditioner uses more energy during the afternoon when it is hot. Therefore, an energy efficient air conditioner will have a larger impact on peak demand than off-peak demand. An energy efficient dishwasher, on the other hand, uses more energy during the late evening when people do their dishes. This appliance may have little to no impact on peak demand.
If the demand for energy services remains constant, improving energy efficiency will reduce energy consumption and carbon emissions. However, many efficiency improvements do not reduce energy consumption by the amount predicted by simple engineering models. This is because they make energy services cheaper, and so consumption of those services increases. For example, since fuel efficient vehicles make travel cheaper, consumers may choose to drive farther and/or faster, thereby offsetting some of the potential energy savings. This is an example of the direct rebound effect.
Estimates of the size of the rebound effect range from roughly 5% to 40%. The rebound effect is likely to be less than 30% at the household level and may be closer to 10% for transport. A rebound effect of 30% implies that improvements in energy efficiency should achieve 70% of the reduction in energy consumption projected using engineering models.
