Thursday, October 11, 2007

CMI: U.S. Programs for Appliance Efficiency Part 2

Article 5 in a series that looks Princeton's Carbon Mitigation Initiative, which has proposed 15 carbon reduction strategies, in 4 broad categories, each of which could be scaled up to provide 1/7th the CO2 reduction necessary to stabilize the atmosphere.

Category 1: Efficiency and Conservation
Efficient Buildings

Appliance Efficiency Standards

Efficiency standards, which are overseen by the Department of Energy, set mandatory baselines for appliance energy use. In a policy development that has strong echoes to today’s battles over carbon emissions, appliance manufacturers initially opposed any standards but eventually came to support federal standards as it became clear that the alternative would be a patchwork of state standards.

Although opposed by anti-regulatory zealots, efficiency standards offer a solution to the problem that the market seems unable to solve by itself: contrary to what we might assume, the market does not offer clear or effective incentives for energy efficient products—to either manufacturers or consumers. Here are a few reasons from the American Council for an Energy Efficient Economy, some of which may sound familiar to readers:

* Third-party decision makers (e.g., landlords and builders) who purchase appliances but do not pay the operating costs of the products they purchase;

* Panic purchases that leave little time for consumers to become educated (how many of us have done this?)

* Inadequate and misleading information about the relative energy performance of products; and

* High first costs for efficient equipment due to small production quantities and the fact that manufacturers frequently combine efficiency features with extra non-energy features in expensive "trade-up" models.

Arguably the most effective standard has been for refrigerators, which represent the largest single energy user in many households. Refrigerators in 1972 averaged 1,986 kWh/year; in 1985, they averaged 1077 kWh/year. Power used by the average new refrigerator has continued to drop, falling 49%, from 974 to 500 kWh/year between 1987-2004, even as the units got larger.

Benefits of efficiency standards
Again, from ACEEE:

# In 2000, according to analyses by the U.S. Department of Energy and ACEEE, standards reduced U.S. electricity use by approximately 88 billion kWh and reduced U.S. total energy use by approximately 1,200 trillion Btus. These savings are 2.5% and 1.3% of U.S. electricity and energy use in 2000, respectively.

# In 2000, standards reduced peak generating needs by approximately 21,000 MW — equivalent to displacing seventy 300 MW power plants. Without these savings, current electricity shortages would be significantly worse.

# Over the 1990–2000 period, standards have reduced consumer energy bills by approximately $50 billion. Under standards, equipment prices have risen modestly, but estimates by the Lawrence Berkeley National Laboratory and ACEEE indicate that the benefits are more than 3 times the costs on a net present value basis.

# As old appliances and equipment wear out and are replaced, savings from existing standards will steadily grow. By 2010, savings will total more than 250 billion kWh (6.5% of projected electricity use) and reduce peak demand by approximately 66,000 MW (a 7.6% reduction). Over 1990–2030, consumers and businesses are projected to save approximately $186 billion (1997 dollars) from standards already adopted.

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