HISTORICAL GAINS IN ENERGY EFFICIENCY, 1949-2006 Ahmad Faruqui Sanem Sergici
description
Transcript of HISTORICAL GAINS IN ENERGY EFFICIENCY, 1949-2006 Ahmad Faruqui Sanem Sergici
HISTORICAL GAINS IN ENERGY EFFICIENCY, 1949-2006
Ahmad FaruquiSanem Sergici
Lafayette, California
February 8, 2008
2
US consumption growth slowed down markedly after the OPEC Embargo in 1973
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
Year
Gro
wth
Rat
e (%
)
Growth Rate (1949-1975)
Growth Rate (1975-2006)
Growth Rate (2007-2030)
3
The slow down in growth can be used to derive an upper-bound for the gain in energy efficiency
• By fitting a simply regression model, we have estimated the annual (exponential) growth rate of electricity consumption during 1949-1972 period at 7.6%
► This is what the growth rate would have been during the post-75 period absent the EE initiatives and other factors (such as structural change in the economy and slower growth in productivity)
• Using the same methodology, we have estimated the growth rate of electricity consumption during 1975-2006 period at 2.5%
• The wedge between electricity consumption series w/ and w/o energy efficiency gains is 12,571 TWh in 2006
4
Electricity consumption in 2006 would have been 300 percent higher at pre-embargo growth rates
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
Year
Ele
ctri
city
Con
sum
pti
on
(b
illi
on
kW
h)
Electricity Consumption (1950-1975)
Electricity Consumption (7.5% between 1975-2006)
Electricity Consumption (2.6% between 1975-2006)
Electricity Consumption (2.6% between 2006-2030)
Electricity Consumption (1.2% between 2006-2030)
Source: Data are taken from EIA Annual Energy Review 2006
Wedge=12,571 TWh
5
The wedge expressed as percentage of electricity consumption in the absence of energy savings
Wedge as % of Electricity Consumption w/o Energy Savings
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Year
Wed
ge a
s %
of
Con
sum
pti
on
Wedge as % of Consumption
6
The wedge in logarithmic terms
5.0
6.0
7.0
8.0
9.0
10.0
Year
ln (
Ele
ctri
city
Con
sum
ptio
n) (
billi
on k
Wh)
ln (Electricity Consumption) (1950-1975)
ln (Electricity Consumption) (7.5% between 1975-2006)
ln (Electricity Consumption) (2.6% between 1975-2006)
ln (Electricity Consumption) (2.6% between 2006-2030)
ln (Electricity Consumption) (1.2% between 2006-2030)
Source: Data are taken from EIA Annual Energy Review 2006
7
About 40 percent of total energy consumption is due to electricity
Energy Consumption By Sector (2006) Total (%) Electricity+Electricity related Losses (%)
Residential 21 15Commercial 18 14Industrial 33 11Transportation 28 0
Total 100 40
Source :AEO 2008
40% of total energy consumption can be attributed to the electric energy consumption.
8
ACEEE has also quantified the historical gain in energy efficiency for the US as a whole
Between 1970-2006, total U.S. energy consumption increased from 68 to 100 quads
• ACEEE finds that absent the efficiencies, U.S. energy consumption would have been 200 quads in 2006
• This corresponds to a wedge of 100 quads (29,310 TWh)
• 11,724 TWh (or 40 percent) of this wedge can be attributed to electricity savings
• This is very close to our estimate of the wedge (12,571 TWh)
9
Question of the day
• What are the components of the wedge?
• I.e., what is the role of the following factors:► Electricity prices► Codes and standards for appliances and buildings► Lower GNP growth► Structural change in the economy away from heavy
industry► Utility DSM programs
• The answers to these questions are available in bits and pieces
10
The California Energy Commission (CEC) has quantified the components of the wedge in the state
Building & Appliance Standards
Utility and Public Agency Programs
Market and Price Effects Total
Building & Appliance Standards
Utility and Public Agency Programs
Market and Price Effects Total
1990 5,740 994 253 6,987 2,499 398 12,109 15,0062000 11,650 1,308 413 13,371 6,736 1,358 8,259 16,3532005 14,615 1,416 447 16,478 9,572 1,987 13,724 25,2832008 16,336 1,355 458 18,149 11,682 2,132 15,420 29,2342013 18,977 1,256 476 20,709 15,563 2,094 17,135 34,7922018 21,533 1,186 497 23,216 19,608 2,052 18,447 40,108
Commercial Energy Savings (GWH) Residential Energy Savings (GWH)
Source: California Energy Demand 2008-2028 Staff Report- page 28
11
According to CEC estimates, building& appliance standards constitute a larger portion of energy savings for residential customers compared to that for commercial customers
Building & Appliance Standards
Utility and Public Agency
Programs
Market and Price
Effects Total
Building & Appliance Standards
Utility and Public Agency
Programs
Market and Price
Effects Total
1990 82% 14% 4% 100% 17% 3% 81% 100%2000 87% 10% 3% 100% 41% 8% 51% 100%2005 89% 9% 3% 100% 38% 8% 54% 100%2008 90% 7% 3% 100% 40% 7% 53% 100%2013 92% 6% 2% 100% 45% 6% 49% 100%2018 93% 5% 2% 100% 49% 5% 46% 100%
Residential Energy Savings (GWH) Commercial Energy Savings (GWH)
12
Share of building& appliance standards in total savings increases over time
0%
5%
10%
15%
20%
25%
1980 1990 2000 2007 2011 2013 2018Year
Price Effects (%)
Building& Appliance Standards (%)
Utility& Agency Programs (%)
Total Energy Savings (%)
13
Savings due to utility and agency programs expressed as percentages of total load forecast remain relatively constant over time
Percentage of Load Forecast Offset by DSM Activities
0%
5%
10%
15%
20%
25%
Year
Sav
ings
as
% o
f F
orec
aste
d E
ner
gy
Price Effects (%)Building& Appliance Standards (%)Utility&Agency Programs (%)Total Savings (%)
14
Additional evidence comes from a paper entitled, “Energy Efficiency Policies: A Retrospective Examination” (*)
This paper reviews the literature and identifies up to 4 quadsannual energy savings (approximately 1,172 TWh)
• At least half is attributable to appliance standards and utility based DSM
• Implementation of residential appliance standards leads to an estimated residential annual electricity energy savings of 0.59 quads (approximately 172 TWh) in 2000
• Incremental energy savings from our analysis is 713 TWh in 2000► 24% (172/713) of the savings can be attributed to the residential
appliance standards
Total electric energy consumed in 2000 was 3,592 TWh (EIA, AER 2006)
• This implies that residential appliance standards saved 5%(172/3592) of total electric energy consumed in 2000
(*) Gillingham, Kenneth, R. Newell, and K. Palmer (2006), “Energy Efficiency Policies: A Retrospective Examination,”Annual Review of Environmental Resources, 31:161-92.
15
EIA has compiled data on utility DSM spending levels and associated efficiency gains
This implies that utility based DSM programs saved 1.5% total electric energy consumed in 2000 (but the reference point is not pre-embargo trends).
54 TWh in 2000 corresponds to 8% (54/659) of the total savings we have estimated for 2000.
Source: Energy Efficiency Policies: A Retrospective Examination, 2006
16
US electricity intensity stopped growing after the 1973 embargo and began to decline in the mid-1990s
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
Year
Ele
ctri
city
In
ten
sity
(th
ou
san
d k
Wh
/rea
l G
DP
(B
illi
on
$))
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Electricity Intensity
Value added by Private Goods-Producingindustries as % of GDP
Source: BEA 2008 and Annual Energy Review 2006
17
Several factors drive US electricity consumption
0
20
40
60
80
100
120
140
160
Year
Ind
ex V
alu
e (1
94
9=
10
0)-
- fo
r p
rice
of
elec
tric
ity
19
60
=1
00
0
200
400
600
800
1000
1200
1400
1600
Ind
ex v
alu
e (1
94
9=
10
0)
Price of Electricity (2000$- cents/kWh)Value added by Private Goods-Producing Industries as % of GDPValue Added by Private Services-Producing Industries as % of GDPCooling Degree Days (CDD)Heating Degree Days (HDD)Electricity Consumption (billion kWh)US GDP (2000$-billion $)
Source: Data are taken from EIA AER 2006 and BEA 2008
18
U.S. Cooling and Heating Degree Days- 1949-2006Price of Electricity- 1960-2006
0
20
40
60
80
100
120
140
Year
Ind
ex V
alu
e (1
949
=1
00
)--
for
pri
ce o
f el
ectr
icit
y 1
96
0=10
0
Cooling Degree Days (CDD)
Heating Degree Days (HDD)
Price of Electricity (2000$- cents/kWh)
Source: Annual Energy Review 2006
19
Value Added Shares of Goods and Services Industries as % of U.S. GDP- 1949-2006
0
20
40
60
80
100
120
140
160
Year
Ind
ex V
alu
e (1
949=
100)
Value added by Private Goods-Producing Industries as % of GDP
Value Added by Private Services-Producing Industries as % of GDP
Source: BEA
20
U.S. GDP and Electricity Consumption- 1949-2006
U.S. GDP and Electricity Consumption- 1949-2006
0
200
400
600
800
1000
1200
1400
1600
Year
Ind
ex
Va
lue
(1
94
9=
100
)
Electricity Consumption (billion kWh)
US GDP (2000$-billion $)
Source: Annual Energy Review 2006
21
So how we do put all this together?
• Regression models are being run with different combinations of variables to decompose the wedge
• Initial results are encouraging► Price effect has been estimated► GNP effect has been estimated► Weather effects are minimal► The rest can be attributed to efficiency programs and
codes and standards
• Results will be available sometime next week
22
What is the future potential for energy efficiency?
• A detailed end-use cum regional assessment is being carried out by Global
• Aggregate results at the national level are now available from an expert survey
23
Survey results : Part I
Part I involved 2 questions.• 50 survey participants returned their Part I
responses.• Not all 50 participants opined on all questions in
Part I- there are several blank responses for each question.
24
Q1- In your view, at the national level, what percent of annual industry revenues are likely to be spent on energy efficiency in each year below?
2010 2020 2030
Std Dev 0.04 0.08 0.10Min 0.3% 1.0% 1.0%Max 20% 45% 50%Mean 3% 6% 8%Median 2% 3% 5%Mode 1% 2% 5%
Mean values for 2010, 2020, and 2030 are respectively 3%, 6%, and 8%
25
Distribution of Responses: Q1, 2010
Distribution of Responses for 2010
0
5
10
15
20
25
30
0-2% 2-4% 4-6% 6-8% 8-10% 10-12% 12-14% 14-16% 16-18% 18-20% 20-22% 22-24% 24-26% 26-28% 28-30% NA
Response
Fre
qu
ency
2010
26
Distribution of Responses: Q1, 2020
Distribution of Responses for 2020
0
2
4
6
8
10
12
14
16
0-2% 2-4% 4-6% 6-8% 8-10% 10-12% 12-14% 14-16% 16-18% 18-20% 20-22% 22-24% 24-26% 26-28% 28-30% NA
Response
Fre
qu
ency
2020
27
Distribution of Responses: Q1, 2030
Distribution of Responses for 2030
0
2
4
6
8
10
12
14
16
Response
Fre
qu
ency
2030
28
Q2- In the preliminary 2008 Annual Energy Outlook “Reference” Forecast from the U.S. Energy Information Administration, U.S. electricity consumption is projected to increase by 30% between 2008 and 2030. In your view, how much of this projected load
growth is likely to be offset by energy efficiency (EE)?
On the average, participants conjecture that 40% of the projected increase will be offset by EE.
Std Dev 0.22Min 10%Max 100%Mean 40%Median 25%Mode 25%
% of Load Growth Offset by EE
29
Distribution of Responses: Q2
Distribution of Responses
0
2
4
6
8
10
12
14
16
0-10% 10-20% 20-30% 30-40% 40-50% 50-60% 60-70% 70-80% 80-90% 90-100% NA
Response
Fre
qu
ency
Frequency