For the third part of this series on utilities, and after tackling solar and power purchasing agreements (PPAs), I am going to delve into how companies save energy through efficiency.
Energy efficiency is the cheapest of solutions. A report by ACEEE – the American Council for an Energy-Efficient Economy – noted that the average cost of saving a kilowatt hour is 2.8 cents while the retail cost in the United States is 10 cents. In the electricity-using sector, saving a kilowatt hour can cost as little as one-sixth of a cent, says Mr Lovins of Rocky Mountain Institute as The Economist explained last year.
Here are two examples among many others of how companies can cut their costs while preventing carbon emissions:
LED light bulbs are a hot technology that has became much cheaper in the past few years. Costs plummetted by a massive 94 percent between 2008 and 2015 (Source, US DOE via ThinkProgress). As I noted in a previous article, if all light bulbs in the United States were replaced by such bulbs, the potential savings could be an absolutely huge amount of $37 billion per year ! This would halve the amount of energy consumed for lightning in the country.
Another possiblity for companies is to benefit from new ways of producing their goods, with significant savings. In Factor Five, the author, Ernst von Weizsäcker, explains how the steel industry could tremendously take advantage from Electric Arc Furnace as it is as much as 90 percent more efficient than the current Basic Oxygen Furnace (BOF) used in almost all factories today.
This is an example among many others developped in this great book. This is why no less than $56 billion were invested worldwide on energy efficiency in 2012 in the manufacturing sector, with a high share related to electric motor systems. (source Ecofys and HSBC).
To conclude, it is worth noting that energy efficiency’s potential is still vastly untapped. So this is why it is important for companies to develop what Industry Week calls energy awareness.