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Report: Boosting Energy Efficiency Would Bring Vast Health Benefits

In the News
Friday, April 13, 2018

A new report estimated the sweeping public health benefits that a 15 percent reduction in energy demand would yield in one year.

The February report from the American Council for an Energy-Efficient Economy, or ACEEE, and Physicians for Social Responsibility, or PSR, found that the savings from modestly cutting energy demand in the electric sector, and thus reducing air pollution, would be the equivalent of the annual insurance premiums for nearly 3.6 million families.

The health harms from air pollution reviewed in the report include premature deaths, respiratory-related visits to the hospital, heart attacks, lost work days and cases of acute bronchitis.

According to the report, this single year reduction in energy demand in the power sector would result in:

  • More than six lives saved per day from premature death
  • Up to $20 billion in avoided health harms
  • Nearly 30,000 fewer asthma episodes

Energy efficiency investments reduce the need to generate electricity from polluting power plants, reducing air emissions and reducing health harms. The ACEEE and PSR estimated the following substantial reductions in lung-damaging air emissions:

  • Particulate emissions: more than 20,000 tons, or 11 percent
  • Nitrogen oxide emissions: about 192,000 tons, or 18 percent
  • Sulfur dioxide emissions: about 276,000 tons, or 23 percent

Energy efficiency would also slash emissions driving climate change. Carbon dioxide would be reduced by 14 percent or 285 million tons.

Energy efficiency can be used to dampen price volatility in the electric markets, according to an ACEEE report published this month. Utilities typically purchase power on the open market and need to determine how much power they’ll need to purchase. They essentially bet on power prices going forward to avoid having to buy on the spot market, where prices can be very high. But to hedge against price volatility, they have to pay a premium that eventually shows up on ratepayer bills. If utilities are wrong, they’ve paid too much ­– if not, they make out. 

The 15 percent reduction in energy demand studied in the February report would, in reality, occur over a number of years, but given current trends it is an easily attainable goal. Energy efficiency already meets 18 percent of U.S. electric demand.

The lifecycle cost of energy efficiency is two to three times less than new coal, natural gas or nuclear power plants. Though utilities incur additional costs to hedge against possible bad weather events, energy efficiency is purchased at a low cost and the price of the investments stays the same, as direct savings and other benefits accrue from those investments over a 15- to 20-year period.  Saving kilowatt-hours upfront, instead of generating them and betting on their future price, poses far less financial risk to utilities and ratepayers. 

With 2.2 million jobs, the energy efficiency sector shouldn’t be sneezed at. But the health, climate and financial benefits are unignorable. Energy efficiency should be the cornerstone of any national or state energy policy.

 

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