Aggressive adoption of energy efficiency programs in the South would lower utility bills by $41 billion, create 380,000 new jobs, reduce the need for new power plants, and save 8.6 billion gallons of freshwater by 2020 according to a new study presented in a Congressionial briefing by Public Policy Professor Marilyn Brown.

The study, "Energy Efficiency in the South" was released April 13 by a team of researchers led by Brown and her co-lead author Etan Gumerman of Duke University's Nicholas Institute. Brown and Gumerman presented the study during an April 14 briefing for Congressional staff and other stakeholders hosted by the Environmental and Energy Sustainablity Institute. Also speaking at the briefing was John Wilson, Research Director at the Southern Alliance for Clean Energy.

The study discusses the economic and environmental benefits of increasing energy efficiency in 16 southern states. According to the study aggressive adoption of energy efficiency programs in the South[1] would lower utility bills by $41 billion, create 380,000 new jobs, reduce the need for new power plants, and save 8.6 billion gallons of freshwater by 2020.[2]

The South is the most energy and carbon intensive region in the United States: home to 36 percent of the U.S. population, but responsible for 44 percent of energy consumption and 48 percent of production. Total energy demand in the South, where per capita energy consumption is already higher than average, is projected to increase 16 percent from 2010 to 2030. At the same time, many Southern states spend less on energy efficiency programs than their peer states in other parts of the country. The research strongly indicates the South's projected growth in energy consumption need not materialize if the region begins to tap into its tremendous energy efficiency potential.[3]

"An aggressive commitment to energy efficiency could be an economic windfall for the South," said Brown. "Such a shift would lower energy bills for cash-strapped consumers and businesses and create more new jobs for Southern workers."

The energy efficiency policies examined by the research team fall into three broad categories: residential, commercial and industrial. Residential policies include changes to building codes, appliance standards and incentives, weatherization assistance, retrofit incentives and equipment standards. Commercial building policies include appliance standards and building retrofit incentives. Industrial policies include plant utility upgrades, process improvement policies, and combined heat and power incentives.

"Energy Efficiency in the South" found that the adoption of aggressive energy-efficiency initiatives in the South would:

1.Prevent energy consumption from growing over the next 20 years. In the absence of such initiatives, energy consumption in these three sectors is forecast to grow by approximately 16 percent between 2010 and 2030.

2. Generate new jobs, cut utility bills and sustain economic growth. Overall utility bills would be reduced by $41 billion each year in 2020 and $71 billion in 2030; the average residential electricity bills would decline by $26 per month in 2020 and $50 per month in 2030; electricity rate increases would be moderated; and 380,000 new jobs would be created by 2020 (annual job growth increases to 520,000 new jobs in 2030). The region's economy is anticipated to grow by $1.23 billion in 2020 and $2.12 billion in 2030.

3.Reduce the need for new power plants. Almost 25 gigawatts of older power plants would be retired and the construction of up to 50 gigawatts of new plants (equal to the amount of electricity produced by 100 power plants[4])would be avoided.

4.Result in substantial water conservation. The reduction in power plant capacity would save southern NERC regions[5] 8.6 billion gallons of freshwater in 2020 and 20.1 billion gallons in 2030.

"The set of energy efficiency policies we examined are also highly cost effective," said Etan Gumerman of Duke University's Nicholas Institute and co-lead researcher of the study. "On average, each dollar invested in energy efficiency over the next 20 years will reap $2.25 in benefits."

The study was developed using the same state-of-the-art economic modeling tool that the U.S. Energy Information Administration uses in making its annual energy forecasts. The research team used this tool to compare a "business as usual" scenario with a scenario that included a specific set of energy efficiency investments. As the findings indicate, the analysis found substantial reductions in energy use, prices, utility bills, water use and carbon emissions in the energy efficiency scenario as compared with business as usual. This study provides a useful estimate of the benefits associated with an aggressive commitment to energy efficiency. Since it does not include every energy efficiency investment that could be considered, it is by no means an exhaustive measure of the benefits associated with an aggressive commitment to energy efficiency.

"Energy Efficiency in the South" and state profiles that have been developed for each of the states are available on the Southeast Energy Efficiency Alliance (SEEA) website: www.seealliance.org/programs/research.php. This project is funded with support from the Energy Foundation (www.ef.org), the Kresge Foundation (www.kresge.org) and the Turner Foundation (www.turnerfoundation.org).

In addition to Capital Hill briefing, Brown also met with staff of the Senate Energy Committee, Senator Lamar Alexander (R-TN), the Department of Energy, and the Energy Information Administration about the report. Brown has been nominated by President Obama to serve on the Board of the Tennessee Valley Authority and awaits confirmation.

[1] The study covers "the South" as it is defined by the U.S. Census "" the District of Columbia and 16 states: Alabama, Arkansas, Delaware, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia and West Virginia.

[2] Bill savings, job creation and water savings #'s are annual numbers as projected in the year 2020.

[3] McKinsey Global Energy and Markets (2009) published an assessment of economic potential for energy efficiency improvements in the United States. The McKinsey study concluded that the South has the largest energy efficiency resource of any region in the county. The South accounts for 41 percent of the national potential for energy efficiency improvements. This contrasts with the Midwest (26 percent), the West (18 percent) and the Northeast (15 percent).

[4] For this calculation, a medium sized (500 megawatt) coal-fired power plant is used for purposes of simplicity. A larger nuclear power plant produces nearly one gigawatt and a typical natural gas plant produces approximately 300 megawatts.

[5] The North American Electrical Reliability Corporation (NERC) regions covered include all of Alabama, Georgia, Florida, North Carolina, South Carolina, Tennessee, Missouri and portions of Kentucky, Virginia, Illinois, Iowa, Mississippi, Louisiana and Texas.

Written by David Terraso, Georgia Tech Press Office with edits by Rebecca Keane, Ivan Allen College Dean's Office.