The market for energy efficiency is increasing, and more states and Public Utility Comissions (PUCs) are jumping on the bandwagon every day. But where are these new electricity savings going to come from?
I recently stumbled on this ACEEE report (released in March 2009 and available here) covering the increased energy efficiency goals of many states. As the paper summary says, “In just the last few years, energy efficiency has evolved from being largely a token gesture or a ‘public benefits’ set-aside, to being a top-priority utility system resource.” As a result, many states (including Minnesota, Illinois, Ohio, New York, Maryland and Vermont) were increasing their yearly efficiency goals to 1.5% – 2.0% a year, when “the very few top performing states in the nation were only achieving savings in the area of 0.8% per year.” This fact makes these new savings goals look very aggressive. In my mind this is a great thing because efficiency is the cleanest and cheapest form of capacity.
There are a few other interesting findings from this report, which reaffirm a couple persistent issues and trends in this industry:
- “Energy efficiency spending was relatively balanced between the residential and non-residential sectors (median across the states of 44% and 56% respectively), but that savings were relatively skewed toward the non-residential sector (63% non- residential).”
- “Also striking was the extent to which the lighting end use dominated the savings accomplishments, accounting for nearly two-thirds of all savings in the states which had disaggregated data available. In the residential sector alone, lighting accounted for between 63% and 92% of reported savings.”
So let us summarize and distill what we have learned so far:
- States are looking very aggressively to energy efficiency as part of their resource planning, with rapidly increasing goals.
- The bulk of this savings is coming from non-residential (e.g., Agricultural, Commercial, and Industrial) measures.
- Lighting makes up the vast majority of achieved savings.
So this begs my initial question – where are these new savings going to come from?
As the price of efficient lighting comes down, and customers are increasingly happy with the quality of new efficient lamp designs, how are utilities going to continue to squeeze savings out of an increasingly saturated market? Like squeezing juice from an orange, at some point the effort needed increases faster than the juice keeps coming. To make matters worse for utility programs, as the federal government gets in the mix, new legislation could eventually phase out much of the inefficient lighting. This increases the baseline lighting efficiency and makes it more difficult to claim large savings for lighting projects.
Since the majority of savings typically come from the non-residential sector, it seems logical to focus on these industries for more savings. And, where better to look than some of the most energy dense facilities there are – data centers! Studies indicate that data centers are up to 40 times more energy intensive than typical office buildings and that savings potential can run from 25% – 50% per facility. This all adds up to a very concentrated opportunity for energy savings. Sure there are a number of challenges to utility incentives in this space, but what other industries and facility types are utilities going to look to in order to achieve these kind of increased savings goals? To me, this speaks to a large need to investigate and to learn to overcome the challenges to utilities creating incentives for energy efficiency in data centers.
Tags: Data Center, Energy Efficiency, Incentive Programs, Utilities
