Energy Efficiency and the Clean Power Plan
The Clean Power Plan is a historic and important step in reducing carbon pollution from power plants that puts energy efficiency front and center as an important strategy for meeting state goals. For years, energy efficiency strategies have been widely used by states because they can substantially and cost-effectively lower energy demand and carbon dioxide emissions from the power sector. The Clean Power Plan will not only expand these practices – it offers flexible compliance options, providing states a wide array of ways to use energy efficiency to meet their state goals, regardless of the state plan approach chosen.
Energy efficiency programs make perfect sense for states; they have low costs and large potential. Our analysis projects that, in every state, demand-side energy efficiency programs will be a significant component of state compliance plans under the Clean Power Plan. Because energy efficiency is not assumed as part of each state’s goal, it can serve as kind of a “bonus” strategy for compliance – as many comments suggested.
And the energy savings achieved by these programs will not only help cut emissions, they will save consumers money on their electric bills. We project that the Clean Power Plan will spur a 7 percent reduction in electricity demand, reducing electricity bills by, on average, $7 per month for American families and businesses in 2030. The way we’ll get there is through energy efficiency.
Here are ten ways that the Clean Power Plan encourages energy efficiency:
- The Clean Power Plan encourages states to select energy efficiency as a compliance path to meet their goals, leading to cost savings for consumers.
- With the final Clean Power Plan, EPA also proposed model rule text describing how states could credit energy efficiency.
- Draft Evaluation, Measurement and Verification (EM&V) Guidance is available to help states effectively credit demand-side energy efficiency.
- The final Clean Power Plan simplifies interstate accounting for energy efficiency compared to the proposal.
- The Clean Power Plan’s Trading-Ready concept facilitates interstate trading of Emissions Reductions Credits (ERCs) – including those issued for energy efficiency – without requiring formal agreements between states.
- Under a mass-based approach, energy efficiency automatically “counts” toward compliance and states can use an unlimited amount to help achieve their state goals.
- Under a rate-based approach, the final Clean Power Plan enables states to get credit for all eligible energy efficiency projects installed after 2012, a longer time frame than what was proposed.
- Under a state measures approach, the Clean Power Plan allows state energy efficiency policies and programs to be used to meet the emissions guidelines, without requiring the state measures to be federally enforceable.
- The Clean Energy Incentive Program (CEIP) provides additional incentives for early investment in demand-side energy efficiency in low-income communities.
- The Clean Power Plan Toolbox offers resources to help states implement proven, cost-effective energy efficiency strategies.
A more detailed explanation of each item on this list can be found on our Energy Efficiency Fact Sheet.
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