Behavioral energy efficiency could save consumers $2.2 billion

End-use energy efficiency is an effective and inexpensive means of abating greenhouse gas emissions, according to Opower. While other control technologies seek to contain emissions once they’re produced, end-use efficiency prevents them from being produced altogether.

Not only is it less expensive than other abatement options, but end-use efficiency often pays for itself — meeting electricity demand at a lower cost than other generation resources. Environmental Protection Agency (EPA) should permit states and utilities to employ end-use energy efficiency to abate GHG emissions from power plants.

Power plants in the U.S. emit roughly 2.4 billion tons of carbon dioxide per year, about 40 percent of the nation’s total greenhouse gas emissions. Cutting their emissions is critical to combating climate change. On June 25, 2013, the president instructed the EPA to begin drafting rules under the Clean Air Act to regulate GHG emissions from existing power plants. A draft rule is due by June 1, 2014.

If fully deployed, Opower’s behavioral energy efficiency programs have the potential to reduce carbon dioxide emissions by 10 million metric tons and save American consumers $2.2 billion each year.

Opower’s programs can be targeted to deliver savings in specific localities. For utilities, behavioral efficiency offers a scalable, easy-to-deploy alternative to building new capacity. And rigorous EM&V processes ensure that savings promised by behavioral efficiency are reliably achieved.

Behavioral energy efficiency programs have been independently evaluated more than 29 times. In one of the largest randomized field experiments ever conducted, researchers from MIT and NYU found that behavioral efficiency programs produce energy savings in the range of 1.4 to 3.3 percent.

Opower’s behavioral energy efficiency programs, if fully deployed, have the potential to save US consumers over 18 million MWh per year. That’s the equivalent of 10 million metric tons of carbon dioxide annually, as the map below shows.

Behavioral energy efficiency is a particularly effective abatement tool in populous states with carbon-intensive energy systems and lots of electricity consumption per capita. Were behavioral energy efficiency fully implemented in just three states — Florida, Texas and New York — it could prevent the emission of over 2.23 million tons of carbon dioxide each year. That’s equivalent to taking over 464,000 cars off the road.

Just as behavioral energy efficiency helps consumers save energy, it can also help them save money. If fully deployed, Opower’s programs are estimated to save US consumers over $2.2 billion per year. Practically half of those savings ($947 million) can be achieved by fully deploying behavioral efficiency in just five states: New York, Pennsylvania, Florida, Texas and California.

Behavioral energy efficiency is particularly effective at helping consumers save money in places where the price of electricity is already high and / or where they already use lots of energy. Were Opower’s programs implemented in just the three states mentioned above (Florida, Texas and New York) not only would they reduce emissions by over 2.23 million tons of carbon dioxide each year, they’d also save consumers over $537 million.

Behavioral energy efficiency provides the utility industry with an affordable, easy-to-deploy, reliable, and clean resource. Recent studies have found that the levelized cost of capacity from efficiency averages 2.5 cents per kilowatt-hour. That’s a third to a sixth the average cost of new generation. And, while it can take years to build new generation resources, efficiency is readily available.

Behavioral energy efficiency programs are the most rigorously measured programs in the market. They use randomized controlled trials (RCTs) and ex-post measurement—rather than ex ante deemed savings—to quantify savings with over 90 percent statistical confidence, without bias and with precision. This methodology is consistent with the recommendations of the U.S. Department of Energy.

Since the 1990s, the EPA has recognized that energy efficiency can reduce emissions of mercury, nitrogen oxides, sulfur dioxides, and particulates from power generators. After all, every megawatt-hour of power consumers save avoids untold emissions. GHGs are the next logical step.

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