Energy efficiency can help the US deliver an affordable and just energy transition

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Energy efficiency has the potential to help the US to deliver an affordable energy transition, according to the American Council for an Energy-Efficient Economy (ACEEE).

A slew of states with robust climate goals risk incurring higher costs for households and businesses and seeing less-equitable outcomes because they have limited plans for using energy more efficiently, a new ACEEE report has found.

The report states that most state climate policies, such as clean electricity standards and emissions reductions goals, have not articulated the important role of energy efficiency in plans to decarbonise state electric grids and economies.

Without clear direction, state agencies and utility regulators may not prioritise energy-saving efforts, missing a key opportunity to help ensure clean energy and climate targets are achieved—and done so equitably and at lower cost.

Policymakers could, for instance, adopt rules that enable utilities to provide customers incentives for buying electric heat pumps, set building energy performance standards that spur energy-efficient retrofits, or invest in electric vehicle charging infrastructure coupled with comprehensive transportation planning efforts.

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The ACEEE report states that vastly expanded energy efficiency efforts—driven by state goals, direction, and mandates—would:

· Reduce the costs of meeting clean electricity standards by greatly reducing the amount and cost of new renewable energy needed. Combined with demand response measures that shift electric loads to times when renewable energy is abundant, efficiency measures can reduce the challenge of peaks in electric demand and the amount of needed renewables. Efficiency improvements will also reduce the vast land area that will be needed for future solar and wind power facilities.

· Aid the electrification of home equipment and transportation. The large-scale electrification of buildings, transportation, and industry will require not only additional energy generation but also new transmission and distribution investments. Efficiency measures will be critical for mitigating these needs and thus easing the costs of electrification. Measures like weatherization are also crucial for maintaining safe home temperatures in increasingly frequent extreme weather events and associated power outages.

· Make the transition to a decarbonised economy more equitable. Low-income, Black, Hispanic, and Native American households spend a larger share of their income on energy expenses than the average household. Targeted efficiency improvements—particularly for households that are struggling the most—can ensure program benefits extend to all households and immediately and directly reduce energy waste and inequities. Investments in public transit and electric vehicle charging in low-income communities could help ensure clean transportation is available for everyone.

Weston Berg, senior researcher for state policy at ACEEE, said: “Transitioning away from electricity sources that produce greenhouse gases is a big undertaking, and reducing energy waste is one of the most important tools. If your state doesn’t have a pretty clear plan for how to improve efficiency, it’s on an uncertain and potentially costly path toward decarbonisation.

“It doesn’t make sense for any state to go after a big transformation of its energy system with one hand tied behind its back. We don’t want to look back in a decade or two and see that these states left some of the best tools on the table.”

ACEEE’s review of the 17 U.S. states and territories with laws requiring a transition to 100% clean electricity found that only Virginia and Washington State include specific efficiency targets.

Of the 24 states (and the District of Columbia) with greenhouse gas emissions reduction goals, 8 make no mention of energy efficiency, while 15 mention it in an undefined way. Only New York and the District of Columbia’s emissions targets encompass specific energy consumption reduction goals.