Policy Drivers for Improving Electricity End-Use Efficiency in the U.S.: An Economic-Engineering Analysis

This paper estimates the economically achievable potential for improving electricity end-use efficiency in the U.S. The approach involves identifying a series of energy-efficiency policies aimed at tackling market failures, and then examining their impacts and cost-effectiveness using Georgia Tech’s version of the National Energy Modeling System (GT-NEMS). By estimating the policy-driven electricity savings and the associated levelized costs, a policy supply curve for electricity efficiency is produced. Each policy is evaluated individually and in an Integrated Policy scenario to examine policy dynamics. The Integrated Policy scenario demonstrates significant achievable potential: 261 TWh (6.5%) of electricity savings in 2020, and 457 TWh (10.2%) in 2035. All eleven policies examined were estimated to have lower levelized costs than average electricity retail prices. Levelized costs range from 0.5 – 8.0 cent/kWh, with the regulatory and information policies tending to be most cost-effective. Policy impacts on the power sector, carbon dioxide emissions, and energy intensity are also estimated to be significant.

• Marilyn A. Brown

• Energy, Climate and Environmental Policy

• School of Public Policy