U.S. Can Combat Climate Change and Save Money, Even as Electricity Demand Rises

WASHINGTON, DC, January 1, 2000 (ENS) - Demand for electricity in the United States will rise by 2.5 percent this year and a further 1.5 percent in 2001, and utilities will use more coal and natural gas as their generation fuel, the nationís energy experts predict. But a new study by a nonprofit agency finds that the nation could reduce its greenhouse gas emissions and save consumers $500 billion by adopting energy efficient policies.

power plant

Power plants burning fossil fuels can release greenhouse gases into the atmosphere (Photo by Richard Frear, courtesy National Park Service)
Electric utilities will increase their use of coal by 2.3 percent and burn 9 percent more natural gas to generate power in 2000, while the use of oil will decline by 14.5 percent due to rising oil prices, according to the Energy Information Administrationís (EIA) latest short term energy outlook. EIA is the statistical arm of the U.S. Department of Energy.

Petroleum prices are forecast to drop below $20 a barrel in 2001, which will encourage oil-fired generation to recover. Natural gas will maintain its price advantage over oil as a fuel for utility generation, but this advantage will narrow in 2001 as oil prices decline while gas prices stay fairly flat.

Coal remains the least expensive fossil fuel for power combustion, and prices will decline this year even after costs to comply with the amended Clean Air Act are included, the EIA says. Continued increases in mining productivity, as well as the closing of costly marginal mines east of the Mississippi, have kept coal supply costs on a gradually declining trend for many years.

The use of hydropower as a source of generation will continue to decline in both years, the EIA predicts, while nuclear power will remain retain its 1999 share into 2000 and fall slightly in 2001.


Hydropower currently provides only 10 percent of U.S. electricity (Three photos courtesy National Renewable Energy Lab)
Coal is currently used to generate 55 percent of U.S. electricity, while nuclear provides 22 percent and natural gas and hydro provide 10 percent each. Oil provides 3 percent, while renewables are marginal.

A study released by the American Council for an Energy-Efficient Economy (ACEEE), a nonprofit group dedicated to advancing energy efficiency as a means of promoting both economic prosperity and environmental protection, says the adoption of ten new policies would stimulate widespread use of more efficient appliances, vehicles, buildings, power plants and industrial facilities.

The report, "Meeting America's Kyoto Protocol Target: Policies and Impacts," says the policies would accelerate the use of renewable energy sources and the shutdown of dirty coal fired power plants.

"These ten initiatives could cut U.S. carbon emissions in 2010 by 500 million tons per year," says ACEEE executive director Howard Geller, who co-authored the study. "The global warming pollution cut could exceed 1 billion tons per year by 2020 as efficiency improvements continue to be made and the use of renewable energy sources accelerates."

Under terms of the 1997 protocol negotiated in Kyoto, Japan, industrialized nations would limit their emission of six gases that are blamed for global warming. If the U.S. ratifies the protocol, it will be required to reduce its emission levels to seven percent below 1990 levels by 2012.


Increased use of renewable energy sources such as wind power could reduce U.S. emissions of greenhouse gases
The creation of a Renewable Portfolio Standard (RPS) as part of the federal restructuring of the U.S. electric utility industry is one of the ten policies proposed in the report. A bill proposed by the Clinton administration would set a RPS level of 7.5 of electricity to come from renewable energy sources, and a number of individual states have included RPS levels as part of their deregulation legislation.

The other nine measures involve new appliance efficiency standards and product labelling; stronger energy codes for the construction of efficient new buildings; stimulating the upgrade of existing buildings to save energy; a public benefit trust fund as part of electric utility restructuring; tougher fuel economy standards and market incentives for efficient new vehicles; greenhouse gas standards for motor fuels; reducing barriers to combined heat and power production in factories and buildings; voluntary agreements and incentives to reduce industrial energy use; and tighter emissions standards on coal-fired power plants.

"We estimate that the ten policies would save $200 billion net through 2010 and over $500 billion net through 2020 for the nation as a whole," says Geller, who explains that the key to meeting the U.S. target for the Kyoto agreement without economic disruption is to increase energy efficiency on a wide scale, and to invest the energy savings to pay for the cost of the efficiency measures and renewable energy technologies.

The report is designed to counter reports that meeting the Kyoto target would harm consumers and businesses and lower economic growth or that it is too late to meet the target.


More energy efficient buildings could save millions of dollars in energy costs
In addition to lower energy costs and reducing emissions, the ACEEE recommendations would lower oil imports and improve the U.S. trade balance, cut urban air pollution, improve public health and enhance U.S. industrial competitiveness.

"If we are intelligent about the policies and measures used to reduce greenhouse gas emissions, it can be a boon to the economy, to consumers and to the environment," says Geller. "Adopting these policies makes sense even if climate change turns out to be a minor problem."

The report is available online at: http://aceee.org/pubs/e993.htm