In September 2004, Senator Byron L. Dorgan asked the Energy Information Administration (EIA) to analyze a variety of energy efficiency policies using assumptions provided by the Alliance to Save Energy (ASE). EIA screened a broad range of policies individually and analyzed two multi-policy cases in detail.
The analysis was conducted using EIA’s National Energy Modeling System (NEMS), incorporating the data and assumptions from the reference case of the Annual Energy Outlook 2005 (AEO2005).
Case 1 includes:
- Tax credits for energy-efficient residential building upgrades, equipment, and appliances; higher efficiency standards for residential furnaces, certain appliances, and manufactured homes;
- Tax credits for energy-efficient commercial heating and cooling equipment, and higher efficiency standards for certain commercial equipment;
- Tax credits for small combined-heat-and-power systems;
- A voluntary agreement to reduce industrial energy intensity by 2.5 percent annually from 2006 to 2016;
- Reform of the Corporate Average Fuel Economy (CAFE) test procedures to eliminate a 20-percent shortfall between tested fuel economy and on-road results;
- An Energy Efficiency Performance Standard (EEPS) for natural gas and electricity suppliers in five “average” States to reduce growth in their customers' energy use by 0.75 percent per year from 2009 to 2025.
In addition to the policies in Case 1, Case 2 includes:
- Revisions to residential and commercial building codes to improve energy efficiency;
- A voluntary program in the electric and natural gas industries to increase their efficiency from 2006 to 2016;
- The EEPS for natural gas and electricity suppliers would be implemented nationally, with an annual growth reduction target of 0.5 percent per year.
The specifics of the policies are detailed in the report. EIA simulated some of the policies based on the changes in cost resulting from the tax incentives or the changes in efficiency mandated by the regulations. However, the voluntary programs and energy efficiency performance standards could not be explicitly modeled within NEMS. For these policies, the report uses assumptions that were provided to EIA as a part of the study request.
Results
Compared to the AEO2005 reference case, total projected energy consumption in 2025 is reduced by 2.9 percent (3.9 quadrillion Btu) in Case 1 and by 7.0 percent (9.3 quadrillion Btu) in Case 2.
The energy reduction in Case 1 consists of petroleum (2.4 quadrillion Btu), coal (1.0 quadrillion Btu), and natural gas (0.5 quadrillion Btu).
Projected Energy Consumption in Reference Case
and Multi-Policy Cases, 2002-2025
(Quadrillion Btu)
Source: Energy Information Administration.
In Case 2, coal use declines the most (3.9 quadrillion Btu), followed by petroleum (2.6 quadrillion Btu), and natural gas (2.5 quadrillion Btu).
The CAFE reform policy accounts for 50 percent of the energy savings projected for 2025 in Case 1 and 21 percent of the Case 2 savings.
Just over half the total reductions in Case 2 are attributed to electricity generation.
The net import share of oil consumption falls from 68.4 percent in 2025 in the reference case to 67.3 percent in both multi-policy cases.
The Case 2 polices also reduce dependence on imported natural gas in 2025 from 28.2 percent in the reference case to 26.1 percent in Case 2.
Overall carbon dioxide emissions in 2025 are reduced by 3.5 percent in Case 1 relative to the AEO2005 reference case, and by 8.3 percent in Case 2.
The report discusses the potential macroeconomic effects of the policies, but impacts on energy prices and expenditures could not be estimated reliably. The report also provides a detailed comparison of the contributions of the individual policies, and analyzes the impacts of the CAFE test reform on petroleum consumption, light-duty vehicle travel, the average price of a new car or truck, and sales of light-duty vehicles.
“Assessment of Selected Energy Efficiency Policies” is available on the EIA Web site at http://eia.doe.gov/oiaf/service_rpts.htm
For general information about energy, contact the
National Energy Information Center at 202-586-8800 or infoctr@eia.doe.govIf you are having technical problems with this website, contact the
EIA Webmaster at wmaster@eia.doe.gov or call 202-586-8959
Questions about the report's content should be directed to:
- Daniel Skelly, Office of Integrated Analysis and Forecasting
dskelly@eia.doe.gov
Phone: (202) 586-1722
URL: http://www.eia.doe.gov/emeu/plugs/pljune05.html
File last modified: June 27, 2005
