The Economic Benefits of an Energy Efficiency and Onsite Renewable Energy Strategy to Meet Growing Electricity Needs in Texas

John "Skip" Laitner, R. Neal Elliott and Maggie Eldridge

September 2007

Abstract

Texas is one of the most rapidly growing states in the country.  One of the critical concerns in maintaining the robustness of the Texas economy is supporting the growing demand for electricity—especially when that growth is rising more quickly than for the United States as a whole.  The challenge is to meet the new demand for electricity in ways that maintain competitive electricity costs and also reduce environmental impacts.  In March 2007, ACEEE published a report suggesting that a combination of energy efficiency and renewable energy technologies can meet the growing need for electricity.   The findings of that report indicated that the alternative energy efficiency and renewable energy scenario could help stabilize overall energy prices, lower electricity bills, and increase system reliability within the state’s utility sector.  The question answered in this companion study is whether the recommended alternative policy scenario could enable, perhaps even spur, continued economic growth within Texas.

In this follow-up report, we review the macroeconomic impacts that likely would unfold under these alternative policy recommendations.  Generally, we find that cost-effective investments in the combination of energy efficiency and alternative generation technologies can actually reduce overall electricity costs, boost net employment, and reduce air pollutants within the state.  For example, by 2023 (the last year of this analysis), businesses and households in Texas are expected to enjoy a net savings of more than $5 billion.  As a result of this greater energy productivity, the state is projected to show a net employment increase of about 38,300 jobs.  This is roughly equivalent to the employment that would be directly and indirectly supported by the construction and operation of 300 small manufacturing plants within Texas.  In addition, air emissions from power plants might be reduced by 20–22 % (also by 2023).  The extent to which these benefits are realized will depend on the willingness of business and policy leaders to implement the recommendations that are found in the earlier assessment.

- View full report as a PDF or click to order hard copy.

26 pp., 2007, $16.00, E076