Energy Efficiency, Sourcing Renewables  -  March 30, 2020 - By Jake Duncan, IMT

Stronger Together: Efficiency With Instead of Efficiency First

As the demand for climate action continues to ramp up, more cities, businesses, and utilities are discussing their decarbonization strategies for the years ahead. However, achieving a fully decarbonized energy system is a colossal task, requiring revolutionary innovation in engineering, business models, and policy, as well as a new scale of cooperation between utilities, the private sector, and the public sector. Robust decarbonization means transforming energy supply (to 100% renewable energy available all year round, everywhere) and demand (to smart, efficient, and all-electric buildings and vehicles). To advance these efforts, we will need to shift the way building owners and tenants, city leaders, utility representatives, and communities think about buildings and the role of energy efficiency.

A New Paradigm is Necessary to Meet Our Goals

“Efficiency first” has long been the mantra of many energy advocates, including IMT—that is, reduce consumption as much as you can first, then deal with delivering clean power. This conventional thinking treats efficiency as a standalone option, presenting it as step one in a linear loading order. However, the game is changing. The rapidly falling cost of renewables and storage, along with a push for electrification, is drastically changing the way buildings and the grid operate. The equation is not as simple as it used to be.

We must change the dialogue to think of buildings as part of a system, not islands whose choices have no impact on anyone but themselves. Applying a systems-thinking perspective reveals that clean energy options can be most impactful when combined.

For instance, consider electrification. Transitioning all building systems to be powered with electricity instead of with fossil fuels on its own may result in increased consumption of dirty electricity since depending on intermittent renewables like wind and solar means clean energy is not available during all hours of the day. New electricity demand may still be consuming fossil fuel-based electricity as the grid cleans. Increased demand from electrification also means we have to invest in substantially more renewables and associated infrastructure to power the economy, which can be costly to ratepayers and stretch the limits of our supply chains. For example, in the case of New England, electrification may require the region to build renewables at a rate as much at 8 times the current rate to meet their climate goals.

However, if we layer energy efficiency with renewables and electrification, we see these approaches build on each other.  Efficiency reduces total grid needs and yields savings now while we build renewables as fast as possible to power the electrifying building and transportation sectors, which are now minimized and renewable-powered.

Instead of thinking of projects as either an electrification project, an efficiency project, or a solar installation, a systems thinking approach shows us that they are all decarbonization projects. By combining the elements of decarbonization (electrification, efficiency, renewables, and demand management) in each project or program, we layer each approach’s strengths and weaknesses to create the strongest decarbonization approach.

This column originally appeared as an IMT blog.

Jake Duncan, senior associate at the Institute for Market Transformation supports IMT clients by establishing the economic and environmental foundations for energy efficiency policies, programs, and investments. He provides quantitative analysis and market research for IMT’s programs, applying previous experience in the energy and utilities spaces. Jake holds a bachelor’s degree in economics from Georgia College and a master’s degree in Climate Science and Policy at Bard College’s Center for Environmental Policy.

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