Navigant Research Blog

On Energy Efficiency, Congress Dithers

Benjamin Freas — February 17, 2014

The current congress’s first session was the least productive in recent history, and after the recent Politico Event, Energy and the 113th Congress, I’m not holding out much hope for the next one. During the event, Rep. Joe Barton (R-Texas), senior Republican on the House Energy and Commerce Committee, remarked, “This is not going to be an active legislative congress,” as he dismissed the Energy Savings and Industrial Competitiveness Act (which has been bogged down in the Senate).  Rep. John Shimkus (R-Ill.) agreed, claiming that efficiency would account for only a small percentage of energy use.

Nothing could be further from the truth. As pointed out in Navigant Research’s report, Energy Efficient Buildings: Global Outlook, commercial buildings accounted for 22% of total national energy consumption in 2012.  Currently, the efficiency standards of these buildings are set locally by state and municipal government.  ASHRAE 90.1 – a standard developed by the American Society of Heating, Refrigerating and Air-Conditioning Engineers that sets minimum requirements for building envelops, heating, ventilation, air conditioning (HVAC) and lighting efficiency, and controls – has been adopted by many states in some form. But not every state has adopted the 2010 version, and some states that have adopted it are trying to revert to an older, less-strict version.

Cutting Demand

Provisions of the current version, ASHRAE 90.1-2010, translate to energy savings of about 18% from the 2007 version, according to the Pacific Northwest National Laboratory.  The Energy Savings and Industrial Competitiveness Act establishes ASHRAE 90.1-2010 as the national baseline for energy codes, and requires incremental energy efficiency increases on top of that.  This would have a profound impact on the country’s energy demand.  To put an 18% reduction in commercial building energy use in perspective, an energy use reduction of just 1.3% for the existing commercial building stock translates to a savings equivalent to the output of a typical nuclear power plant.  In other words, energy efficiency is a big deal. Similarly, The National Academies explains how 98% of the chemical energy stored in coal is wasted between generation and a typical incandescent light bulb.

Thankfully, Rep. Diana DeGette (R-Colo.) offered a reasonable perspective, calling energy efficiency “the low-hanging fruit,” insisting that Congress must come to a bipartisan agreement on the subject.  Indeed, the Energy Savings and Industrial Competitiveness Act has gained support from industry (the American Chemical Society, the National Small Business Association, the U.S. Chamber of Commerce, and the National Association of Manufacturers), environmental groups (the Sierra Club, the Natural Resources Defense Council, and the Environmental Defense Fund), not to mention the Christian Coalition of America.  Despite legislative gridlock on this bill, a more stringent regulatory environment is likely to take hold in the United States over the next several years.

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