Energy Efficiency: Why the SEEA’s Spotlight is on the Southern States
by David Fessler, Energy and Infrastructure Expert
Friday, April 16, 2010: Issue #1240
You hear that giant sucking sound?
It’s the southern portion of the United States guzzling its way through the energy infrastructure.
When it comes to energy efficiency – or lack thereof – the region needs to do much more in terms of boosting it. Big time.
Now lest you think that’s just me taking a shot at the South, a new report from the Southeast Energy Efficiency Alliance (SEEA) backs me up…
Why the South’s Energy Efficiency Problems Are Mounting
The 180-page report is extremely detailed, analyzing the residential, commercial and industrial sectors with regard to energy use.
And there are several very good reasons why it highlights the South as a major energy guzzler:
- Accounting for 36% of the population, the South (which the study counts as 16 southern states, plus Washington, D.C.) is the largest region in the United States. It’s also the fastest-growing region.
- The South sucks up 44% of the total energy consumed in the United States.
- Per capita energy consumption is higher in the South for all three sectors – residential, commercial and industrial.
- The South consumes an enormous share of industrial energy, racking up 51% of the nation’s total.
So why does the South use more energy? And why does the report identify the region as a particular problem area? It found that:
- Electricity rates in the South are lower than just about anywhere else in the country.
- Many southern states have significant cooling and heating loads.
- While the South produces 48% of the nation’s energy supply, the vast majority comes from burning fossil fuels.
- Southern residents are lazy when it comes to energy conservation. (Again, that’s not me taking an arbitrary jab at Southerners – it’s based on public opinion polls.)
- There’s little penetration of energy-efficient products (based on purchase behavior data).
- It spends the least amount of money of any U.S. region on energy efficiency programs.
So what are the solutions to these problems?
The Backwards Argument Towards Energy Efficiency
While some believe that the best way to combat energy problems is to crank up the energy infrastructure and boost the power by building more resources, their argument is backwards.
The SEEA report says that simply by making the South more energy-efficient, the region can bypass the need to build more power plants, while also becoming more cost-efficient and creating jobs, too. Here’s a summary of its major findings:
- Energy consumption in the South is forecast to increase at least 16% between now and 2030. But energy-efficiency initiatives – if implemented – could completely negate that increase.
- 25 Gigawatts (GW) of older power plants could be shut off and dismantled.
- 49 GW of new plants wouldn’t have to be built to meet growing energy demand.
- By 2020, energy bills in the South would be reduced by $41 billion. By 2030, that saving would shoot up to $71 billion.
- Nearly 400,000 jobs would be created and the region’s economy would grow by $1.2 billion annually.
- 20 billion gallons of fresh water – that would otherwise be used for power plant cooling – would be conserved annually.
The report also proposed energy-efficient solutions for the industrial, commercial and residential sectors…
~ Industrial: Industrial process improvements could save huge quantities of fossil fuels. Energy recovery systems turning waste heat into power also factored into the savings.
~ Commercial: Products like computers, copiers and fax machines are all huge energy hogs. But improving commercial appliance standards would save nearly 84% of the costs in the sector.
~ Residential: Residential retrofits and improved standards for appliances would dominate the savings.
Southern Energy Solutions Could Spill Across the United States
While the SEEA study was limited to the Southern region of the United States, it’s likely that every state in the union could benefit from the report’s findings.
And while critics will point to the cost, arguing that it would be too expensive to implement all the recommendations in the study, the authors covered that part, too. Their cost-benefit-analysis found that for every $1 spent on the initiatives, $4 in energy savings would result.
Policymakers everywhere want to know the best way to jump on the energy efficiency bandwagon. Reviewing the details of the SEEA study would get them off to a great start. You can review the SEEA report for yourself.
Good investing,
David Fessler
The Case for Energy Efficiency…
Regular Investment U readers know that David Fessler is a big fan of alternative energy. And while many Americans embrace the idea of alternative energy, others need more persuading.
However, the switch to alternative energy isn’t as simple as flipping a switch. It will take decades. In the meantime, the quickest and cheapest way to reduce our energy consumption is through measures designed to promote its efficient use.
Related Investment U Articles:
- Energy Efficiency Spending is Skyrocketing
- How to Profit When Power Plants Retire
- Residential Energy Consumption: Uncovering the Home Power Puzzle
- How to Lower Your Energy Bills for Free
- Obstacles to Nuclear Construction in the United States
10 Responses to “Energy Efficiency: Why the SEEA’s Spotlight is on the Southern States”
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David Fessler is the energy and infrastructure expert for Investment U.
I think the goal is to switch to LED or Oled lighting in the future. That is more efficient than CCFL and with volume the prices will come down.
Good article
thanks
tom
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I agree – LED lighting is far more efficient than CCFL even. I don’t see why we should fill our houses with CCFL bulbs now only to have to change them all over to LED lighting a year down the road. Let us skip that already outdated phase of our lighting evolutionary process.
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My website offers many energy saving solutions for industry and domestic users. Governments should lead the way by adopting some.
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For comparison purposes, if we convert all energy usage to kWh, the average daily energy usage per person in the US is 250 kWh, while in Europe it’s only 150. So improving on that number should be the key metric.
As for Payback – to make that ratio meaningful it must include a time factor. If, as the article states, each $1 spent on efficiency gains $4 in savings, the question is “How long to collect those savings?” The $1 is right now and the savings are over time. Capital costs are always more difficult to fund than operational costs because of that reality.
Therefore, the way to accomplish the savings is to take the capital funds out of the savings on a pay as you go basis. In our credit challenged economy that becomes a much greater task. Should this be where the big banks should be investing instead of taking taxpayer funds at 0% interest and investing them in Treasury notes at 4%? If you want a way to legislate growth this could be a good way to start.
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In a subdivision of new, pretentious homes in Keller, Texas, the covenants for the subdivision include the requirement for all roofs to be black, the least energy efficient color. Worse, the covenants ban solar panels on the roofs. Wouldn’t it be great if solar panels were required on all new homes!
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No, The brown shirts replaced by the green shirts gets your where?Think for yourself if you can get out of the way and let the markets finally work as they could if we stop thinking someone is smarter and less corrupt.
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Our family used to own a fire,water, restoration business. The EPA approved protocol to clean up a broken CCFL lightbulb is extremely expensive. I will not have any of them in my home, period. My advice is to wait for LED’s and avoid anything that has mercury. In real estate disclosure states, a broken bulb containing mercury would be a disclosure item that you must disclose.
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Having been raised in the south, but also having lived in the NE, midwest, and NW, I have some experience in comparing climates and culture in all of those locations. I have two comments on this study.
(1) The use of A/C and heat pumps is much greater in the south than elsewhere. They are used year-round, and represent a singularly higher electrical load per capita than elsewhere in the US, especially with the high humidity cooling loads for many months out of the year, both in homes and commercial establishments.
(2) I would like to see the results of this reference study relating to the per capita mfg. GDP of those 16 states, vs other areas of the US (including the value add of energy downstream processing – particularly refinery operations). It should be noted that the less-unionized blue collar work force in the south has attracted a disproportionate share of manufacturing and refinery activity to that part of the US over the past few decades.
Both of the above factors may well account for significant additional/incremental per capita energy consumption in the US south.
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I am fully behind the idea of switching directly to LED lighting and bypassing the (CCFL)compact fluorescent bulb stage completely. The trouble with that is they are pushing these CCFL bulbs at us with a vengeance, and it’s hard to find the LED lighting (which is far more efficient than even CCFL) The Chinese are already selling LED bulbs cheaper than CCFL bulbs and much more efficient. However making the old incandescent bulbs illegal or banning their production is NOT the responsibility of the FED gov’t. If these items are truly outdated the market pressures will phase them out quickly enough. Banning them from manufacture is CLEARLY going to benefit the makers of CCFL and LED bulbs and give them unfair market advantage. Also the article never explained how closing old power plants and NOT building new ones was going to CREATE 400,000 jobs. I also don’t see how the South could be using the most power and yet still be getting the cheapest prices for their energy. In closing I will state that if the new technology is in fact cheaper and better, it will sell itself. I see no reason to get gov’t involved in yet one more industry. Let the market decide their fates. Give people a little credit here, they will choose with their wallets.
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Lower power cost;
First, bulk rates, second cheaper labor and living costs reflected in electricity production costs in general third near by coal and lower government regulation cost . ???
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