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Potential for Energy Efficiency and Renewable Energy to Meet Florida's Growing Energy DemandR. Neal Elliott, Maggie Eldridge, Anna Shipley, John "Skip" Laitner, and Steven Nadel, ACEEE Executive Summary
Florida is among the fastest growing states in the country, and the state’s electricity demand is growing even faster than the state’s population. To sustain this rapid economic and population growth, Florida needs to take action to meet the resulting increases in energy needs. A particular challenge is peak demand (those times when extreme heat or extreme cold crank up air conditioners and heaters), which is growing slightly faster in recent years than regular day-to-day electricity demand, and is the most expensive type of electricity.
Florida’s unique energy vulnerabilities have also become apparent during the past several years. Florida is one of the most natural-gas-dependent states in the country, with more than a third of its electricity generated by natural gas. In December 2005, the natural gas “crisis” drove utility prices from less than $3 per thousand cubic foot to over $14, a price that hurt Floridians’ pocketbooks. The pain intensified when Hurricane Katrina disrupted natural gas supplies and jeopardized electricity generation. While the price of natural gas has fallen over the past year, it still costs over two and a half times more than it did when many of the state’s new natural gas power plants were planned. It is not the bargain we once thought. To meet the growing electricity needs, Florida’s utilities project the need for both more natural-gas- and coal-powered plants.
Opportunities for Energy Efficiency and Renewable Energy
Fortunately, another suite of energy resource options is available—slowing energy demand growth with energy efficiency resources and demand response, and diversifying the supply resources with renewables. This report explores the magnitude of the efficiency and renewable resources that are available to the state, and suggests some specific policies that could be implemented to reduce future energy demands. If all the policies we recommend were implemented, the state could reduce its projected future use of electricity from conventional sources (i.e., natural gas, coal, oil, and nuclear fuels) by about 29% in the next 15 years (see Figure ES-1). Energy efficiency accounts for about two-thirds of the 2023 total 102,513 million kWh electricity reductions, with the renewable energy provisions accounting for the balance.
To make these energy efficiency and renewable energy resources a reality, we recommend eleven specific policies that the state should consider adopting:
Figure ES-1. Share of Future Electricity Consumption that Can Be Met with Energy Efficiency and Renewable Energy Resources
We believe these policies would establish a foundation upon which the state could build a sustainable energy future, while improving the state’s economic health. The most significant energy efficiency recommendation is for a Utility-Sector Energy Efficiency Program, specifically an Energy Efficiency Resource Standard (a utility savings target similar to the RPS concept), which accounts for 30% of the total savings in 2023 (see Table ES-1). As would be anticipated because of the importance of buildings-related electric loads, buildings policies (including an improved building energy code and advanced buildings policies) would contribute another 19% toward the total electricity savings in 2023.
Our calculations show that these energy efficiency and renewable energy policies can also reduce peak demand for electricity by over 20,000 MW in 2023, or 32% of projected peak demand. In addition, we also recommend that the state consider implementing a robust demand response effort, which could reduce peak demand by an additional 4,353 MW in 2013 and 9,637 MW in 2023, or 9% and 15% of projected peak demand, respectively (see Figure ES-2). While the utilities in the state have had various curtailable tariffs for many years, there is much more that could be done to reduce peak electrical loads. Demand response programs combined with energy efficiency and renewable energy policies could slow the rapid growth in peak demand projected by the state’s utilities.
Our study asserts that energy efficiency, coupled with renewable energy, can slow future electricity demand. It would also diversify the state’s energy resources, making Florida less vulnerable to global markets and volatile energy prices. The study shows that implementing energy efficiency policies alone (such as efficient windows, compact fluorescent light bulbs, and ENERGY STAR new homes and appliances) can almost offset the future growth in electric demand.
Table ES-1. Summary Results from Analysis of Recommended Policies
Figure ES-2. Impact on Summer Peak Demand of Expanded Demand Response, Energy Efficiency, and Renewable Energy
Economic and Jobs Impacts
Increased investments in energy efficiency rather than construction
of new conventional power generation would result in significant
reduction in consumer energy expenditures over the next 15 years,
while promoting robust job growth in the state (see Table ES-2).
The energy efficiency policies would reduce consumer energy costs
by over $28 billion relative to constructing new power plants, and
would result in the creation of more than 14,000 new jobs—many trade
jobs related to the implementation of the energy efficiency measures.
The direct and indirect total jobs mean that the efficiency strategy
would be equivalent to nearly 100 new manufacturing plants relocating
to Florida, but without the demand for infrastructure and other
energy needs. And, in light of recent volatility in energy prices,
the efficiency strategy would have an added benefit of balancing
the fuel supply and therefore stabilizing energy prices.
The state’s environment would benefit as well, with reductions in conventional power plant operations reducing sulfur dioxide (SO2) by more than 16 thousand tons and nitrogen oxides (NOX) by almost 11 thousand tons. With concern growing about global warming, these efficiency measures would reduce carbon dioxide (CO2) by over 37 million metric tons in 2023, making a down payment of reducing the state’s carbon signature. Table ES-2. Economic Impact on the State of Florida of Expanded Energy Efficiency
Conclusions
Based on this analysis, we are confident that energy efficiency and renewable energy can change Florida’s energy future for the better. Energy efficiency resource policies can offset the majority of projected load growth in the state over the next 15 years. Expanded development of renewable energy resources in the state would further reduce future needs for conventional generation. Combined, these policies can meet nearly 30% of projected needs for electricity in 2023, deferring the need for many new electric power generation projects in the state.
The economic savings from the recommended energy efficiency policies alone in this report can cut Florida consumers’ electricity bills by about $840 million by 2013 and $28 billion by 2023. While these savings will require substantial investments, they cost less than the projected cost of electricity from conventional sources. In addition, the investments would save consumers money while creating new jobs for the state.
Reducing demand for electricity with efficiency and renewables will also reduce emissions from the combustion of fossil fuels at utility power plants, offering the state a more sustainable environmental future at an affordable cost and allowing the state to start on a path to reducing its global warming emissions.
Florida faces important decisions regarding its energy future. The current course calls for investments in new coal, gas, and potentially nuclear generation to make sure that the state has enough electricity to sustain its economic prosperity. Energy efficiency and renewable energy resources would offset some of that growth in demand, offering a lower cost, cleaner, and more stable energy path, without sacrificing Florida’s quality of life or its economic growth.
View full report as a PDF or click to order hard copy.
106 pp., 2007,
$35.00, E072 |
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