Comprehensive energy efficiency programs have the potential to slash Wisconsin's energy use, cut hundreds of millions of dollars annually in energy costs and create thousands of jobs as early as 2012, according to a study commissioned by the state Public Service Commission (PSC). According to the Energy Center of Wisconsin study, there could be $900 million in net energy cost savings for each year of efficiency investments.
The state report comes on the heels of a McKinsey & Co. report released July 29, concluding that more than a trillion dollars in energy cost savings, 23% less energy use and a reduction of a billion tons of greenhouse gas (GHG) emissions can be achieved by 2020 through an aggressive national energy efficiency push.
Wisconsin electricity use has grown steadily since 2000, averaging about 1.2% annually, and the PSC-sponsored report said that annual power use reductions of 1.6% could kick in by 2012. Annual reductions in natural gas use could reach 1% by 2012 after declining an average of 0.1% annually since 2000, the report said.
Savings from efficiency efforts for both electricity and natural gas would generate 7,000-9,000 jobs, according to the report. The executive director of the nonprofit center, Susan Stratton, said the most important aspect, and often overlooked, is the "compounding effect" of efficiency measures over time.
"Each year that we invest in efficiency programs the dollars saved continue to accrue, economic development and job opportunities grow, and greenhouse gas (GHG) emissions drop further," she said.
McKinsey's report, "Unlocking Energy Efficiency in the U.S. Economy," was cosponsored by a dozen other organizations, including the U.S. Department of Energy, Environmental Protection Agency (EPA), nonprofits and five energy companies (DTE Energy, Exelon Corp., PG&E Corp., Sempra Energy and Southern Company).
Long touted by alternative energy advocates, renewable energy backers and environmental organizations, the proposition that "energy efficiency offers a vast, low-cost energy resource for the U.S. economy" was ratified by McKinsey in this study, for which Sempra and EPA issued separate statements.
Small-scale renewable energy systems in homes and small businesses also were examined in the Wisconsin study, and it was found that these relatively small investments in clean energy systems would generate net savings of $20 million annually on energy and support another 300-350 jobs, avoiding another 39,000 tons of GHG emissions.
Wisconsin has been wrestling with energy efficiency for a number of years, completing studies in 2004-05 that confirmed the cost-effectiveness of many efficiency programs. In the fall last year, the PSC approved Wisconsin Energies current energy efficiency programs and a national rating agency in the sector ranked Wisconsin ninth in the nation in its efficiency programs.
By 2018, the report said if annual power reductions averaged 1.6% and gas consumption declined at 1% annually, cumulative savings attributable to efficiency for electricity and natural gas would be 2,200 MW of avoided generation and 330 million therms, respectively. These savings would eliminate nearly 12 million tons of GHG emissions, according to the PSC's report.
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