Investment advisors like Barron’s are apparently alarmed by a sudden drop in U.S. energy use, and believe that it indicates that our economy must now be in the deep freeze. Money guys—who always equate rise in GDP with rise in energy use—can imagine no other explanation for reduced energy use than that we are now experiencing economic doom, hiding in caves and struggling to work in wheelbarrows instead of our God-given SUVs.
Those of us who read green tech news, of course, know that decoupling energy use from GDP is the holy grail of an advanced low-carbon economy—that the world’s climate-conscious nations are striving to achieve. There’s even a pretty common name for it, “reducing energy intensity.”
For example, we read here how GM cut the energy intensity of its manufacturing plant 30 percednt or that globally, energy intensity has not dropped—mostly because developing nations tend not to do as well as already industrialized ones, and there’s more of them now, with China ramping up.
From 1989 – 2010, electric utility efficiency programs saved about 1,171 billion kilowatt-hours of electricity, saving enough to power 102 million average U.S. homes for one year (based on 2010 average residential usage of 11,500 kWh/year), according to the U.S. Department of Energy.
It is a given in climate policy circles that cutting the amount of energy used to generate a unit of GDP is a good thing—a target to aim for.
So it is a bit disconcerting (to this green reader, at least) to notice that this is not the typical view. We all dwell in such different walled information-ghettos that the same news means something completely different to others.
Yes, we went through a financial near-depression in 2008. But simultaneously, we had also begun serious climate policy in 2005 that has been yielding great energy news every day on green tech sites for the last four years. Some states began utility energy efficiency mandates as early as 1999, and ramped them up since.
By contrast with our satisfaction with stories of energy efficiency, among the money-centric, there is a hysterical reaction of alarm in response to news of the drop in energy use over the last few years, first fretted about by the Wall Street Journal during the financial shock of 2008. (Perhaps this visceral fear of less energy use is what is behind the antique lightbulb fetish of the Republican Congress?)
And even though now our GDP is now back up above 2008 levels, our energy use remains far below 2008 levels. How can that be?
Well, that’s what better building codes, utility efficiency improvements, tighter appliance efficiency advances and higher CAFE standards are all about.
One example of the electricity-saving policies electric utilities now use to meet state energy efficiency mandates is “demand response.” Because peak hours can take a lot of fossil fuel (and hence carbon emissions) to power up, utilities—in many of the states with climate policies that incentivize it—offer some of their big commercial customers a break on their utility bills if they allow the utility to cycle off their A/C, for example, for perhaps a minute every half hour during peak hours.
By aggregating their demand-response customers into rolling blocks with brief energy cuts each, for so brief a moment as to be imperceptible at each site, utilities don’t need to fire up a peaker plant. Even many home energy users can be aggregated like this.