The Potential For Energy Efficiency In The State of Iowa

Abstract

The purpose of this study was to do an initial estimate of the potential for energy savings in the state of Iowa. Several methods for determining savings were examined, including existing programs, surveys, savings calculators, and economic simulation. Each method has advantages and disadvantages, trading off between detail of information, accuracy of results, and scope. This paper concentrated on using economic simulation (the NEMS model (EIA 2000a)) to determine market potential for energy savings for the residential and commercial sectors. The results of surveys were used to calculate the economic potential for savings in the industrial sector. The NEMS model is used by the Energy Information Administration to calculate twenty-year projections of energy use for every region of the country. The results of the Annual Energy Outlook 2000 were used as the Base case (EIA 1999a). Two alternative cases were created to simulate energy savings policies. Voluntary, market-related programs were simulated by lowering the effective discount rates that end-users use when making decisions on equipment purchases. Standards programs in the residential sector were simulated by eliminating the availability of low efficiency equipment in future years. The parameters for these programs were based on the Moderate scenario from the DOE Clean Energy Futures study (Interlaboratory Working Group 2000), which assumed increased concern by society on energy efficiency but not to the point of fiscal policies such as taxes or direct subsidies. The study only considered a subset of the various programs, policies, and technologies that could reduce energy use. The major end-uses in the residential sector affected by the policies were space cooling (20% savings by 2020) and water heating (14% savings by 2020.) Figure S-1 shows the space cooling savings when voluntary programs and minimum efficiency standards were implemented. Refrigerators, freezers, and clothes dryers saw slight improvements. The study did not involve changes to the building shell (e.g., increased insulation) or residential lighting improvements. Nevertheless, the residential sector's market potential for electrical energy savings was calculated to be 5.3% of expected electrical use, representing 850 GWh by 2020. Natural gas savings could be 2.4% of expected gas use, representing 2.1 trillion Btus. Using expected prices for energy in that year, these represent savings of $47 million and $12 million per year. In the commercial sector, the study only considered voluntary market-based policies for some of the technologies. The most notable savings were in ventilation (12% savings by 2020), lighting (12% savings), refrigeration (7% savings), water heating (6% savings), and space heating (5% savings by 2020). The commercial sector's market potential for electrical energy savings based on the programs modeled was calculated to be 5.1% of its total expected electrical use, representing 605 GWh of power by 2020. Natural gas savings were 2.3 trillion Btu, 3.7% of use. Using the same prices as the residential sector (5.5{cents}/kWh and $5.74/MBtu), the savings represent $33 million and $13 million per year, respectively.