Much of our energy debate in New England centers around its supply – does it come from natural gas, coal, or nuclear; do we bring in hydro power from Canada or put up turbines on our hills? Supply is important, but we don’t pay enough attention to the other side of the energy equation – that of demand. How we use energy is, I think, even more important than energy supply. Focusing on how we use energy, and working toward becoming more efficient in our consumption, could have profound impacts on our energy needs and our economy (we could spend the money from energy savings in other ways), our planet (we would need fewer power plants and transmission lines and would reduce pollution and greenhouse gas emissions), and society (lower-income families would spend a smaller portion of their paychecks on heating and keeping the lights on).
What we have already gained from energy-efficiency investments is remarkable. The International Energy Agency (IEA) now refers to energy efficiency as the first fuel because the savings from avoided energy use are now greater than the supply of any single energy source (oil, electricity, or natural gas) in Australia, USA, and certain EU countries. The IEA estimated that, in 2015, energy-efficiency investments worldwide were of the order of $221 billion. The following quote, taken from the foreword of their recent report, captures the importance of energy efficiency and its central place in any energy policy, whether it be local, statewide, or country-based.
“It is becoming increasingly clear that energy efficiency needs to be central in energy policies around the world. All of the core imperatives of energy policy – reducing energy bills, decarbonisation, air pollution, energy security, and energy access – are made more attainable if led by strong energy efficiency policy. As the world transitions to clean energy, efficiency can make the transition cheaper, faster and more beneficial across all sectors of our economies. Indeed, there is no realistic, or affordable, energy development strategy that is not led by energy efficiency. For the IEA, it is the first fuel.”
In a report entitled “The Greatest Energy Story You Haven’t Heard: How Investing in Energy Efficiency Changed the US Power Sector and Gave a Tool to Tackle Climate Change,” the American Council for an Energy-Efficient Economy (ACEEE) noted that energy efficiency in the US is presently the third-largest electricity resource, after coal and natural gas, and is projected to become the largest resource by 2030. If we had not implemented various energy-efficiency measures since 1990, we would have had to build 313 additional power plants. ACEEE forecasts that, by 2030, energy-efficiency savings could be equivalent to the generation from 800 power plants!
Energy efficiency (EE) is important for all the obvious reasons: it reduces peak power demand and power plant construction; it decreases environmental and health impacts that result from the harvesting and burning of natural resources, such as coal and natural gas; it extends the life of those resources, and greenhouse gas (GHG) emissions are reduced. It also reduces expenditure on energy for homes, businesses, factories—money that can be spent elsewhere. Energy-efficiency investments create jobs, improve local resilience, and have been shown to be the lower cost option when compared with power plant investments. Increasingly, a host of multiple benefits that stem from EE initiatives is now recognized. Some of these were highlighted in a recent IEA report depicted in the figure below. These numerous outcomes lead to a cascade of multiplier effects throughout the economy, in which EE savings lead to reduced energy consumption, which stimulates economic development, resulting in increased prosperity and reduced poverty. Quite frankly, it is simply the right thing to do to extend our future on this planet and, as noted in the IEA quote above, needs to be front and center of any energy strategy.
The starting point for consideration of energy-efficiency measures is knowledge of the large-scale supply and consumption of energy. A good way to visualize these is through Sankey or flow diagrams. (For more information about Sankey diagrams, take a look at one of my early NH blogs) The Sankey diagram below was generated by the folks at Lawrence Livermore National Lab (LLNL) based on 2012 data. The LLNL experts annually prepare these useful and informative diagrams for energy flow in the US and they appear in energy-related presentations all over the place. They don't update the diagrams for individual states every year, however, so the NH data are a bit dated, but still informative.
The diagram shows that the bulk of New Hampshire’s energy supply comes from oil, nuclear, natural gas, and biomass. Over time, renewables such as hydro, wind, and solar are becoming more important, while the use of coal is diminishing.
With respect to consumption, transportation consumes the bulk of the energy, followed by households and commercial enterprises. The pie chart below shows the breakdown of energy usage in NH. To obtain the greatest benefit, the data suggest that state EE measures should be focused on the transportation, household, and commercial sectors.
Source: LLNL Data
When looking at the Sankey diagrams, I am always astounded at the rightmost side of the diagram. It shows the amount of energy that ends up in energy services compared with rejected or wasted energy. Of the 360 trillion BTUs of primary energy supply into NH, two thirds (!) is lost as waste heat. The bulk of this waste comes from inefficiencies in energy generation and transportation losses and, although there are physical limitations as to how much useful energy (such as electricity and motion) we can draw from burning stuff, there is still considerable room for improvement. We can, and should, take a much harder look at improving gas mileage standards for vehicles and incentivizing electricity generators to improve their overall efficiency, for example. It is noteworthy that the move from coal to combined-cycle natural gas electricity generation has improved efficiency. Moreover, the separation of generation activities from the utilities and the development of electricity markets naturally created market incentives for generators to become more efficient: the more effective they are, the lower their costs become. Prior to deregulation, the costs of inefficient generation were simply passed on to ratepayers.
Interestingly, the data show 35% energy waste from residences and commercial enterprises, but only 20% from industrial firms. Energy costs are often a significant component of industrial operating costs, so many companies have a laser-like focus on minimizing these. Nevertheless, reducing energy losses from residences, commercial, and industrial enterprises presents important opportunities for improvement: state-administered EE programs are often directed at these areas, even though they are not (as we note from the Sankey diagram) where the big savings are to be harvested.
Having established the key energy supply and consumption flows for New Hampshire, it is worth examining their historical patterns. The figure below shows the history of energy consumption in NH over 20 years since 1994. Overall, there has been an increase over this period: usage peaked in 2004, fell off for a few years, but, since 2013, there has been an uptick in consumption again.
Overall energy consumption is an interesting number, but it does not take account of structural changes in the economy and demographics. It is more useful to consider gross measures of EE in terms of energy intensity, which is defined as the energy consumed per unit of gross domestic product (GDP) or as energy use per capita. Historical data for NH’s energy intensity are shown in the figure below. It is notable that, even though there are fluctuations from year to year, NH’s energy intensity has declined since 2000, mirroring the change that we have seen across the the US and the world.
These numbers are interesting and encouraging, but it is useful to consider them in context and in comparison with the other New England (NE) states and the US average.
This comparison raises some interesting questions. I was particularly surprised at the three-fold variation in energy intensity across states in a relatively small geographic area. We go from a low of 2.8 in Massachusetts to a high of 8.4 in Vermont and also see big variations in the reduction of energy intensities from 2000 to 2013. The southern NE states generally seem to be doing better than the northern states. I don’t have ready answers to explain these variations, but they are likely to be due to the nature of the economies in the various states, the industrial mix, cost of energy, state regulations, and a host of other factors. The energy intensity in NH is very much in line with the US average, but the decrease in NH over this time period has been lower than the US overall.
The other measure of energy efficiency is energy use per capita, as shown in the figure below. This has also shown a general decrease since 2000, despite an uptick in the last few years, which is perhaps a reflection of the particularly cold winters we experienced.
The table below shows comparative data for the New England states and the US.
Again, the southern NE States have lower per capita energy consumptions, but the spread of values is a lot less than that for energy intensity: 60% vs. 300%. Generally, the values for NE are in line or much lower than the US average. The reasons are complex and state-specific, and depend on population density, transportation networks, and the nature of the industries in the various states. Energy intensity and energy per capita are gross measures of energy efficiency and so one needs to cautious in applying them. Nevertheless, interstate comparisons are useful because they provide opportunities for benchmarking and the adoption of best practices from other states. Generally, the trends are good: energy consumption per capita and per dollar of GDP are down, indicating that we are generally being more efficient about using our energy. I find this encouraging; there is, however, so much more that we can do.
This post has been a rather broad-brush view of energy efficiency, but it has allowed me to update some NH data from earlier blogs and also provides a useful jumping-off point for more specific posts on energy-efficiency programs in NH that I will be posting over the next few weeks. In the meantime, my best wishes for 2017—and do your part for energy efficiency by turning off the lights when you leave the room.
Franklin Pierce University
(*Flow With It - a soul-tinged tune from St. Paul and the Broken Bones, a new R&B group out of Alabama. I just love this stuff.)