Energy Efficiency in California: A Historical Analysis

Lee Schipper and James McMahon

1995

Executive Summary

California is one of the world's top ten consumers of primary energy. Understanding the nature and evolution of energy use and energy intensity is of great interest because of the links between energy, the economy, and the environment. Also, many steps have been taken by the state, by utilities, and by other organizations to increase energy efficiency in California during the past 20 years. However, there has been very little in-depth analysis of statewide energy efficiency or energy intensity trends and how such trends compare to those for the United States as a whole.

This study analyzes energy intensity and efficiency trends in California by sector (residential, service, manufacturing, and transportation). Wherever possible, we use data supplied by California state agencies, such as the California Air Resources Board, Caltrans, and the California Energy Commission. In the manufacturing sector, we use data from federal agencies such as the U.S. Census of Manufacturing. Once assembled, the data are analyzed to create a picture of the structure and intensity of energy use in California and how these factors have changed over time. To the degree possible, California energy intensity values and trends are compared to those for the entire nation.

In the residential sector, final energy demand per household in California declined 27% during 1970-93. Declining energy intensity was due to both structural effects (e.g., shifts in fuel shares and falling occupancy levels) and efficiency effects (e.g., improvements in appliance efficiency and building thermal integrity). It appears that policies such as building codes, appliance standards, and utility DSM programs helped to reduce residential energy use. California residences consume less energy than typical U.S residences, due in large part to structural factors such as less floor area per household, greater reliance on natural gas, and the significantly milder heating season compared to the national average. While California heating intensity (in energy/square meter/degree day) was higher than for the U.S. as a whole in 1975, the gap was narrowed by 1990. For appliances, changes in appliance unit consumption over time, resulting from turnover of the stock, indicate faster decline in unit energy consumptions than for the U.S. as a whole.

In the service sector, electricity use per unit of floor area increased 5% and gas use decreased 26% during 1975-91. In general, most building types show a decrease in energy intensity, with office buildings being the only exception. In offices, electricity consumed by office equipment and air conditioning has increased. While California's service sector is increasing both in absolute terms and as a share of the total U.S. service sector, California's share of national energy use in the service sector has been shrinking over time. Significantly lower service sector energy intensities in California compared to the U.S. are attributed to climatic differences, greater electrification, and policies such as building standards and utility DSM programs.

Manufacturing sector energy intensity is measured as the ratio of energy consumed to value added. Using this measure, California's manufacturing sector energy intensity fell about 32% during 1978-90. The energy intensity reduction due to so-called efficiency improvements was about 22% and the reduction due to shifts in the mix of materials and goods produced was about 10%. Manufacturing energy intensity tends to be lower in California than in the U.S. as a whole. This is due in part to differences in product mix -- energy-intensive manufacturing represents only about 10% of total output in California compared to about 22% for the nation. However, manufacturing energy intensity is lower in California than for the nation as whole when comparing within individual industry categories. This may be due to differences in product mixes within industry categories, as well as differences in energy prices or technology choices.

Transportation of all types accounts for 40-45% of California's total final energy use, a large fraction in part because of relatively low energy use in other sectors. Also, transportation energy use in California is boosted by a high level of interstate and international air, marine, and truck travel. Transport energy use per capita in California declined about 10% during 1978-92. The average on-road fuel economy of cars and light trucks increased from about 14 MPG in 1980 to 21.5 MPG in 1992, similar to national trends, although California's passenger cars appear to be slightly more energy more energy-efficient than typical cars nationwide. Per capita fuel use for cars and light trucks is actually lower in California than for the U.S. as a whole, while that for heavy trucks is about the same. Contrary to popular belief, Californians appear to be less dependent upon automobiles than Americans in other states. When this energy is removed from the comparison, California's per capita energy for travel appears close to the national average. Use for freight could not be compared directly to that for the U.S.

In summary, final energy use per unit of economic output fell 28% in California during 1978-90. About one-third of this decline is due to structural changes and about two-thirds is due to reductions in actual energy intensities. Energy use per capita or per unit of economic output is about 30% lower in California than in the nation as a whole. In this case, about two-thirds of the difference is due to structural and climate effects; about one-third is due to lower energy intensities (including higher energy efficiencies) in California. Finally, it appears that energy intensities fell somewhat faster in California than in the U.S. as a whole during 1978-90. While it is difficult to determine what caused these trends, it appears that both energy prices and state policies played a role.

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82 pp., 1995, $16.00, E951