Energy Efficiency as a Resource

Electrical plug in a field of grassWhen utilities and other groups discuss “energy efficiency as a resource,” they are defining efficiency as an energy resource capable of yielding energy and demand savings that can displace electricity generation from coal, natural gas, nuclear power, wind power, and other supply-side resources. Investments in energy efficiency and the resulting resource benefits are factored directly into utility energy resource decision making about investing in new resources and operating existing systems.

Defining efficiency as a resource and integrating it into utility decision making is especially critical because of the clear resource cost advantage of energy efficiency. Energy savings from customer energy efficiency programs are typically achieved at 1/3 the cost of new generation resources  Efficiency programs can also reduce the need to install, upgrade or replace transmission and distribution equipment.

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ACEEE actively promotes the use of energy efficiency as a resource in utility and regulatory decision making. For many years, Utilities Program researchers have studied how utilities and regulators integrate efficiency into their activities. Since 2001 ACEEE has held a biennial conference  focusing specifically on the subject of energy efficiency as a utility system resource.

Efficiency can also improve system reliability and allow utilities to reduce or manage the demand on their systems — in some cases offsetting the need to add new peak generation capacity.

Reducing fossil fuel use has many additional benefits including reducing air pollution (and greenhouse gases) and decreasing the environmental impacts associated with fossil fuel production and use. Where appropriate, decision-makers can consider these benefits as well when making utility system resource decisions.