The Economic Potential of Energy Efficiency: A Resource Potentially Unlocked by the Clean Power Plan
White Paper, December 2014
The assessments of energy efficiency (EE) potential used in the US 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 -- Principal Paul Hibbard, Vice President Andrea Okie, and Manager Katie 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.