Eat Your Cake and Have It Too: Rethinking Traditional Energy Efficiency

The Association of Energy Service Professionals (AESP) conference held in San Antonio this January certainly had a theme—other than the iconic cowboy boots. Efficiency enthusiasts from across the supply chain gathered for 4 days to advance innovation beyond the traditional concept of energy efficiency. 

Energy efficiency is lauded as a tool responsible for letting us develop as societies, while helping to decouple electricity demand from macroeconomic growth. However, as the energy ecosystem evolves toward more clean, distributed sources, energy efficiency must keep pace. By evolving understandings of energy efficiency beyond a singular tool to reduce kilowatt-hours and therms, we can move toward a clean, distributed energy ecosystem with more expediency.  

Integrated Demand-Side Management

Utility budgets for energy efficiency today are often siloed from funding for other demand-side management programs such as demand response (DR). The advocates for integrated demand-side management (IDSM) that filled the AESP expo halls continued to argue that it is time to move past distinct targets, budgets, and technologies employed to reduce grid strain. Further, as future DR programs are to be designed based on efficient loads, integrating energy efficiency and DR planning will give utilities more flexibility to design holistic programs that boost overall customer engagement.

While definitions of IDSM remain fluid, efficiency professionals supporting integration increasingly acknowledge that more distributed energy resource (DER) technologies are coming online. By preparing to integrate efficiency with a world full of EVs, solar panels, combined heat and power, and battery storage, energy efficiency can be targeted to improve reliability at the times of day and in the locations where it will be of most benefit.

Beneficial Electrification and Energy Efficiency

Historically, siloed energy efficiency policies stood in direct opposition with beneficial electrification. Efficiency calls for reducing demand on the grid while shifting to EVs and electric home heat means higher peak-time demands. State-mandated energy efficiency targets were in explicit efforts, however, to reduce reliance on oil & gas. This dichotomy in policy objectives has historically made striking a balance between increased reliability and reduced greenhouse gas emissions near impossible. 

As more DER technologies come online, and more renewables connect to and green the grid, concerns of harmful electrification should begin to dissipate. By following the IDSM approach mentioned above, efficiency professionals and their partners seek to make electrification a win-win for utilities and the environment. The addition of electric DER technologies need not spark fear of growing solar duck curves and grid collapse as vehicle owners plug into electric chargers at night; instead, by strategically incentivizing end-users to install technologies like storage, efficiency and clean energy resources can boost the benefit of electrification.  

Turning Vision into Reality

Getting all stakeholders in the room to achieve a dreamy, efficient future will surely continue to prove challenging. Further, innovative and integrated approaches to energy efficiency directly challenge the status quo and involve a lot of risk on utilities, regulators, and program implementers themselves. Getting all the stakeholders in the room to address any challenge is difficult, and energy efficiency is no exception. Fortunately, technology can reduce some of these risks and make room for forward-thinking conversation. With improving data analytics, more-targeted program management tools, and lower cost customer-facing technology, efficiency will be proven as an increasingly reliable and necessary tool to achieve the green energy future that so many of us desire. Guidehouse Insights looks forward to following these and other energy efficiency trends and will share several key insights in an upcoming North American Energy Efficiency Implementation report.