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California Must Go All-In on Energy Efficiency to Hit 100% Carbon-Free Target

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Just a few days before Governor Jerry Brown signed legislation [1] committing California to producing 100% carbon-free electricity by 2045, an analysis showed the state will only hit the target by going all-in on energy efficiency.

Some utilities and regulators have questioned whether there’s still a role for energy efficiency in a future where renewable energy and storage costs continue to plummet, and where clean energy provides 100% of electricity,” writes Rachel Gold, utilities program manager at the American Council for an Energy-Efficient Economy. “The answer is a resounding yes—in fact, energy efficiency is crucial to ensuring the transition to a 100% clean energy future is effective, low cost, and equitable.”

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Energy efficiency is still “the cheapest and largest zero-emissions resource,” Gold states, with recent research by the Lawrence Berkeley Laboratory bringing its cost in at 2.5¢ per kilowatt-hour across the U.S. and 3.1¢/kWh in California. “These average program costs have stayed steady in recent years and are lower than utility-scale wind and solar on a levelized, unsubsidized basis,” she notes. “Efficiency also delivers valuable co-benefits that support a clean energy economy: making homes comfortable and healthy, creating productive workplaces, and boosting grid reliability.

Efficiency is also the third-largest resource in the U.S. power sector, and it remains “an enormous opportunity” in California, even after four decades of energy efficiency programming. “A recent California Energy Commission (CEC) study [3] found that current programs could save more energy if they pursued more aggressive pathways, leaving additional savings available to meet these ambitious goals,” Gold reports.

Energy efficiency also promotes the demand-side flexibility that utilities need to integrate larger shares of renewable electricity on the grid.

Though energy efficiency can be costly during times of abundant renewables, it still has benefits that outweigh those costs when considered across the whole year,” she writes. “Targeting investment in efficiency technologies that save at peak times can certainly benefit the system and customers. Locational or time-based incentives, or marketing campaigns that build on existing programs, can support using energy efficiency to shift loads. And efficiency technologies can more directly help shift energy demand and avoid ‘throwing away’ renewable resources through curtailment.