Energy efficiency will play a crucial role in decarbonization because of its potential to reduce costs as the demand for electricity grows, panelists said during a California Energy Commission workshop last week.
“While energy efficiency can reduce greenhouse gases directly, it also has an important role of bringing the decarbonization of the grid, buildings and industry within manageable parameters,” said Ken Rider, chief policy advisor to CEC Chair David Hochschild.
“In other words, energy efficiency makes our challenges smaller in size and therefore easier to overcome,” he said.
But the timing of energy efficiency implementation is key, Rider said.
He gave an example of an energy system transitioning to 100% clean electricity. If energy efficiency measures are rolled out later rather than sooner, the system may end up being built with more capacity than needed, resulting in higher capital costs. In contrast, implementing energy efficiency earlier may reduce capital costs, he said.
“Energy efficiency needs to be considered first in order to gain maximum benefit,” Rider said.
The same principle applies on a smaller scale to a home where an electric heating, ventilation and air conditioning system is being installed, Rider said. If insulation is upgraded first, a smaller HVAC system may be sufficient, saving money and reducing the amount of refrigerant in use.
Rider was one of the speakers during a CEC workshop on Tuesday on the role of energy efficiency in building decarbonization. The workshop was part of the commission’s process for developing its 2021 Integrated Energy Policy Report.
Steven Nadel, executive director of the American Council for an Energy-Efficient Economy, pointed to a 2019 ACEEE study showing that energy efficiency could take the U.S. halfway to decarbonization by 2050.
The energy efficiency of buildings, including building retrofits, smart buildings, and electrification of new and existing buildings, accounts for about a quarter of the potential greenhouse gas reductions, he said.
“Efficiency and renewables are like peanut butter and jelly,” Nadel said. “(It’s) hard to do one without the other.”
Cost of Decarbonization
In another presentation, David Jacot, director of efficiency solutions for the Los Angeles Department of Water and Power (LADWP), discussed ways the utility could get to a 100% renewable-based electric grid.
The National Renewable Energy Laboratory partnered with LADWP on a study, released in March, that analyzes different scenarios and timelines for decarbonization. The LA100 study found that LADWP could decarbonize the grid by 2035, Jacot said, but at a cost of $50 billion to $80 billion.
Jacot said a two-fold strategy is needed for decarbonization. LADWP needs electrification of transportation and buildings to boost its revenues, so that fixed costs can be spread out across more kWh, keeping rates down. Energy efficiency then makes the fixed costs smaller.
“We need the electrification to bring the revenue, and we need the energy efficiency to reduce the infrastructure needs,” Jacot said.
LADWP is getting ready to launch an energy efficiency program called Comprehensive Affordable Multifamily Retrofits. Jacot said the program for multi-family buildings will consist of energy efficiency measures, building electrification and onsite renewable generation.
“The beauty of it is you get the deep energy efficiency, which makes the bill go down,” he said. “You electrify, which may make the bill go up, but then you offset that with the onsite generation, which again, then makes the bill go down.”
New Focus for ESA
Meanwhile, a long-running statewide energy efficiency program is shifting its focus. The Energy Savings Assistance (ESA) program, overseen by the California Public Utilities Commission and offered through utility companies, provides services such as attic insulation, weatherstripping, energy-efficient refrigerators and furnaces, water heater blankets, and repairs to reduce air leaks into the home.
The program was close to reaching its goal of treating all eligible and willing households by the end of 2020 — until the COVID-19 pandemic hit, Kapil Kulkarni with the CPUC Energy Division said during the CEC workshop.
For the ESA program’s 2021-2026 cycle, the focus is shifting to providing deeper energy savings per household rather than the previous volume-based goal, Kulkarni said.
The program’s funding of $2.2 billion over five-and-a-half years includes $104 million for a pilot program to achieve an energy savings of as much as 50% per home. Another $350 million will go toward a multi-family building pilot program. The investor-owned utilities will lead the programs.
Details of the programs are yet to be finalized. A workshop this fall will gather ideas for the program designs. The utilities are then expected to submit program proposals and budgets to the CPUC for approval and begin implementation next year.