July 30, 2009 Lexington, Mass. - As the Senate gears up to consider landmark climate and energy legislation in the coming weeks, a new report [www.mckinsey.com/USenergyefficiency] released this week concludes that elevating energy efficiency to a national priority could save American consumers $1.2 trillion by 2020-about the same amount as the projected 2009 Federal deficit.*1
In issuing its report, McKinsey & Co. state that energy efficiency is the "single most promising resource" in pursuing energy affordability and security. In addition to the tremendous savings to consumers and businesses, the report finds that elevating energy efficiency to a national priority could also create 600,000-900,000 sustainable green jobs and reduce our overall energy consumption by 23 percent - that's equivalent to the total energy consumption of the entire world for two weeks.
"The McKinsey & Co. Report released this week clearly illustrates the impact that energy efficiency can have on the economy and on the country's future energy needs," says Susan Coakley, Executive Director of Northeast Energy Efficiency Partnerships (NEEP). "While pursuing efficiency could save the country over a trillion dollars, it is also important to remember that if we don't act now on a national and regional level, than our inaction could cost us over a trillion dollars."
Through strategic regional coordination facilitated by organizations such as Northeast Energy Efficiency Partnerships (NEEP), the Northeast region of the U.S. is leading the way in energy efficiency as a cost effective resource in several ways:
Savings from energy efficiency programs in Vermont, Massachusetts, Connecticut and Rhode Island implemented since the 1990's have completely or nearly offset energy and load growth in those states in recent years at a fraction of the cost of new supply (e.g., 3.5¢/kWh for efficiency vs. 13¢/kWh for new supply)
Since 2004, northeast state adoption of state appliance efficiency standards has paved the way to more than fifteen new federal appliance standards.Through strategic regional collaborations with industry, ratepayer-funded efficiency programs have transformed the market for a wide range of products (e.g., lighting, clothes washers, residential and commercial air conditioners) - such that the northeast states lead in market share for more efficient products, such as Energy Star and NEMA Premium.
Most northeast states have adopted the recent national model building energy code for new construction and agreed to strong enforcement. Massachusetts recently adopted an optional "advanced" energy code thirty percent above the national model code.
To track the impact of these programs and policies, the northeast states have undertaken the nation's first and only regional effort, the Regional Evaluation, Measurement and Verification Forum, to consistently estimate, evaluate, verify and report energy savings and other impacts (e.g., demand savings, procurement costs, carbon emission reductions).
"Finding ways to improve efficiency is the smartest and most cost effective way to do more with less," says Penni McLean Conner, NEEP Board President and Vice-President of Customer Services at NSTAR Gas and Electric. "It is the result of strong regional collaboration through NEEP that directs the national spotlight on the Northeast as a model for energy efficiency gains. The latest McKinsey report justifies making energy efficiency a national priority, too."
"Energy efficiency is helping Vermont to do more by using less," noted Scott Johnstone, NEEP Board member and Executive Director of Vermont Energy Investment Corporation, host for Efficiency Vermont, Vermont's statewide efficiency utility. "Efficiency is the smartest way to cut our energy consumption and jumpstart our transition to a sustainable green economy. A national effort as recommended by the McKinsey report will help us achieve this faster with even more savings."
"In 2008, NYSERDA's energy efficiency programs provided New York energy consumers over $600 million in savings on their annual utility bills," says Francis J. Murray, a NEEP Board member and President of the New York Energy Research and Development Authority (NYSERDA). "Under the leadership of Governor David Paterson, New York State has established one of the most aggressive efficiency targets in the nation. New York will reduce its projected energy consumption 15% by the year 2015 by quadrupling its investment in energy efficiency. A strong national effort, such as that recommended by the McKinsey report, will provide additional resources to the states and make New York's lofty goal easier to attain."
The report by McKinsey & Co. can be downloaded from the company's website, here: http://www.mckinsey.com/clientservice/electricpowernaturalgas/US_energy_efficiency/
*1Congressional Budget Office, Annual Budget and Economic Outlook, 1/7/09. Please note that $1.2 trillion is gross savings and does not take into account related investments in energy efficiency.
ABOUT NEEP
Northeast Energy Efficiency Partnerships (NEEP) is a regional nonprofit organization founded in 1996 whose mission is to promote the efficient use of energy in homes, buildings and industry in the Northeast U.S. through regionally coordinated programs and policies that increase the use of energy efficient products, services and practices, and that help achieve a cleaner environment and a more reliable and affordable energy system. For more information, visit www.neep.org.