“Negawatts” Turn Out to Be Nugatory 

“Negawatts” Turn Out to Be Nugatory

One of the favorite energy ideas of the thermageddonites is that we can meet a large portion of our energy needs through energy conservation, sometimes called “negawatts.” You don’t need to supply energy you don’t consume! In California, the shutdown of our last nuclear power plant in five years, which currently supplies more electricity than all of the solar panels in the state, will supposedly be replaced by new renewable generation and “conservation.” On the global scale, energy efficiency is expected to account for more than 40 percent of greenhouse gas emissions reductions over the next couple of decades.
No one is against energy efficiency, and in fact greater energy efficiency is a long term trend. There is some reason to doubt whether all of our policy exertions on behalf of energy efficiency have altered significantly the long-term rate of energy efficiency improvement.
Moreover, a new report from the E2e Project (PDF file) throws a lot of cold water on the thesis that conservation/efficiency delivers as promised. (The E2e Project is a consortium of the Energy Institute at Haas at the University of California, Berkeley, the Center for Energy and Environmental Policy Research (CEEPR) at the Massachusetts Institute of Technology, and the Energy Policy Institute at the University of Chicago—a heavyweight lineup.) The E2e Project has done a deep dive into the data involving energy efficiency measures in California’s public schools, and conclude that energy efficiency measures in schools have delivered only one-quarter the expected energy savings.
Here’s the succinct abstract:

In the United States, consumers invest billions of dollars annually in energy efficiency, of- ten on the assumption that these investments will pay for themselves via future energy cost reductions. We study energy efficiency upgrades in K-12 schools in California. We develop and implement a novel machine learning approach for estimating treatment effects using high- frequency panel data, and demonstrate that this method outperforms standard panel fixed effects approaches. We find that energy efficiency upgrades reduce electricity consumption by 3 percent, but that these reductions total only 24 percent of ex ante expected savings. HVAC and lighting upgrades perform better, but still deliver less than half of what was expected. Finally, beyond location, school characteristics that are readily available to policymakers do not appear to predict realization rates across schools, suggesting that improving realization rates via targeting may prove challenging.