How The DOE Thinks We’ll Save Energy Through 2035

In my last post I noted that the DOE thinks growth in energy consumption will average 0.3%  per year, despite a 25% growth in population and an almost doubling of GDP over the same period. I’m referring, of course, to the DOE’s Annual Energy Outlook 2012 With Projections to 2035.

It would take heroic performance and restraint–I called it winning the Green Trifecta previously. Let’s look at how the DOE thinks we’re going to get there.

In the Executive Summary of the report, they speak broadly–“The U.S. does not return to the levels of energy demand growth experienced in the 20 years prior to the 2008-2009 recession, because of more moderate projected economic growth and population growth, coupled with increasing levels of energy efficiency. For some end uses, current Federal and State energy equirements and incentives play a continuing role in requiring more efficient technologies.”

Later I imagine I will have a bone to pick with them regarding both their estimates of GDP growth and the impact of population growth. But let’s park those for the moment and look at more specific mechanisms for moderating energy consumption.

Among them:

  • New greenhouse gas (GHG) emissions and fuel consumption standards for medium- and heavy-duty engines and vehicles, published by the U.S. Environmental Protection Agency (EPA) and the National Highway Transportation Safety Administration (NHTSA) in September 2011.
  • California Assembly Bill 32 (AB 32), the Global Warming Solutions Act of 2006, authorized the CARB to set California’s GHG reduction goals for 2020 and establish a comprehensive, multi-year program to reduce GHG emissions in California. As one of the major initiatives for AB 32, CARB designed a cap-and-trade program that started on January 1, 2012, with the enforceable compliance obligations beginning in 2013.
  • After 2020, growth in manufacturing output slows due to increased foreign competition, slower expansion of domestic production capacity, and higher energy prices.
  • Even as standards for building shells and energy efficiency are being tightened in the commercial sector, the growth rate for commercial energy use, at 0.7 percent per year, is the highest among the end-use sectors, propelled by 1.0 percent average annual growth in commercial floorspace.
  • In the residential sector, increased efficiency reduces energy use for space heating, lighting, and clothes washers and dryers.
  • In the transportation sector, light-duty vehicle (LDV) energy consumption declines after 2012 to 14.7 quadrillion Btu in 2023 (the lowest point since 1998) before increasing through 2035, when it is still 4 percent below the 2010 level.

They have a lot more about residential consumption of energy:

  • Total delivered energy use in the residential sector remains relatively constant from 2010 to 2035, but a 27.5-percent growth in the number of households reduces the average energy intensity of each household. Most residential end-use services become less energy-intensive, with space heating accounting for more than one-half of the decrease. Population shifts to warmer and drier climates also contribute to a reduction in demand for space heating.
  • Portions of the Federal lighting standards outlined in EISA 2007 went into effect on January 1, 2012. Over the next two years, general-service lamps that provide 310 to 2,600 lumens of light are required to consume about 30 percent less energy than typical incandescent bulbs. High-performance incandescent, compact fluorescent, and light-emitting diode (LED) lamps continue to replace low-efficacy incandescent lamps. In 2035, delivered energy for lighting per household in the Reference case is 827 kilowatthours per household lower, or 47 percent below the 2010 level.

We’ll go into all this in detail over the next few posts. There’s more about all of the sectors and I’ll probably spend at least one post on each sector.

My preliminary take-away from all this is that if you postulated any one of these to me I would say it’s well within the realm of possibility. However, if anyone were to tell me that all of these were sure enough bets to make policy decisions on, I would start to shake my head in dismay. That’s more than a Green Trifecta. It would be like winning the lottery on successive days.

One thing that is not explicit in the report but seems to really drive a lot of their thinking–a core assumption seems to be that energy will get more expensive–expensive enough to justify the wholesale changes they are predicting.

They do project a gradual climb in oil prices to $150 per barrel by 2035. (They have a High Oil Price Scenario showing prices reaching $200/bbl and a Low Oil Price Scenario with prices plunging to around $65 and staying there.) But this is odd, as they foresee the coming to market of significant quantities of domestic energy, both oil and gas, as well as the continued successful penetration of some renewables. This would normally put downward pressure on prices. I guess a Republican point of view would suspiciously assert that government will artificially raise energy prices. I wonder if there are other explanations…

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