Getting realistic about energy efficiency.
Sartaz Ahmed is principal at Booz & Co. (N.A.). Contact her at sartaz.ahmed@booz.com. Andrew Clyde,Jim Hendrickson and Joe Vandenberg are vice presidents at Booz & Co. (N.A.). The authors acknowledge contributions by consultants Eric Adamson and Bryan Bennet.
Energy efficiency has emerged as a prominent component of our nation’s energy agenda. This, however, is nothing new. Efficiency always has been perceived as a panacea, particularly during times of rising electricity prices, electricity supply shortages, or transmission constraints. It remains the ultimate low-cost solution that benefits all stakeholders from the federal government to the individual and everyone in between. At the individual level, energy efficiency helps consumers lower their energy bills. It allows utilities to both manage capacity additions during supply shortages and maintain grid stability during transmission constraints. Finally, governments at all levels—federal, state, and local—rely on this low-cost solution to improve supply security and to garner support during times of electricity price escalation. Today, faced with an additional and unique challenge of reducing greenhouse-gas (GHG) emissions on a global level, energy efficiency once more is emerging as an apparent silver bullet solution.