Economic Benefits of Energy Efficiency

This article from Salon.com discusses the benefits to power companies, consumers and the nation of government promoting energy efficiency programs. The author worked for DOE where a competition to save energy resulted in annual savings of $90 million per year, at upfront costs of just $20 million. The idea for the competition was based on something tried at Dow, an ongoing contest where efficiency savings resulting in serious cost savings continue to be discovered year after year, when no one at the start would have thought it was possible to continue saving energy and money.

Discussed are a number of interesting examples of energy savings, plus governmental programs at both the state and federal level, which facilitate the efficiency trend. For example:

Significantly, California adopted regulations so that utility company profits are not tied to how much electricity they sell. This is called "decoupling." It also allowed utilities to take a share of any energy savings they help consumers and businesses achieve. The bottom line is that California utilities can make money when their customers save money. That puts energy-efficiency investments on the same competitive playing field as generation from new power plants.

There is also this interesting observation:

Economic models greatly overestimate the cost of carbon mitigation because economists simply don't believe that the economy has lots of high-return energy-efficiency opportunities. In their theory, the economy is always operating near efficiency. Reality is very different than economic models.

The story ends on a political note, noting a senator in a hearing calling the author's ideas "poppycock." The facts suggest otherwise.