Analysis Group Report Finds That EPA Clean Power Plan Energy Efficiency Assumptions Are Reasonable

December 16, 2014

The assessments of energy efficiency (EE) potential used in the U.S. Environmental Protection Agency's (EPA) proposed Clean Power Plan are reasonable, but likely conservative, according to a new report conducted by Analysis Group. In the report, "The Economic Potential of Energy Efficiency: A Resource Potentially Unlocked by the Clean Power Plan," Analysis Group researchers comprehensively reviewed EE potential studies and historical information on state and utility implementations of energy-reducing building codes and appliance standards to assess the EPA's key assumptions in the Clean Power Plan.

Based on a meta-analysis of recent EE potential studies and the historical experiences of several states, the EPA found that achievable potential from EE programs is 1.5 percent of retail electricity sales per year, and that improved state and local building codes can account for 13--18 percent of that potential. The Analysis Group team -- Vice Presidents Paul Hibbard and Andrea Okie, and Associate Katherine Franklin -- comprehensively reviewed the studies underlying the EPA's assessment and conducted a literature review of other potential studies. The authors found that the EPA's assessment of EE potential is reasonable, but may significantly understate the potential for EE savings in states over the compliance period and understate the impact of building codes and appliance standards. The report also describes how EE potential is defined and how such studies are performed, outlines challenges in comparing results across studies, reviews the studies considered by the EPA, and assesses available information on building codes and appliance standards.

Read the report

Read about a related report on EE ramp rates and savings levels