Report: Efficiency, demand response spending continues to rise, nears $9B

Dive Brief:

  • Utilities continue to recognize the value of conservation and are spending more than ever on demand side management programs, with the bulk of that going into energy efficiency, according to a new report from the Consortium for Energy Efficiency (CEE).
  • CEE's 11th Annual Industry Report finds energy efficiency and demand response program spending reached $8.7 billion in 2015, up 1% from 2014 levels. About 15% of the spending went towards natural gas programs, with the remainder on the electric side.
  • The vast majority of funding for these programs is coming from ratepayers, according to CEE. But other sources of funding include wholesale capacity market revenues, the Northeast's Regional Greenhouse Gas Initiative and weatherization assistance programs. ​

Dive Insight:

As the efficiency adage goes, "the cheapest kilowatt is the one you never use."

Energy providers in the United States and Canada appear to be embracing that idea: According to CEE's estimates, spending on demand management in 2015 resulted in gross savings of 29,590 GWh and 496 million gas therms.

And ratepayers picked up the bill for about $8.2 billion of a total $8.7 billion in expenditures. The Regional Greenhouse Gas Initiative in the Northeast contributed 7% of funding in participating states, a testament to the the cap-and-trade scheme's ability to help fund conservation.

While utilities have made significant progress, CEE Executive Director Ed Wisniewski said in an announcement that the results "indicate widespread recognition of remaining savings potential. The level of investment is a testament to the strength of utility and state government leadership.”

The report's data includes responses from 321 program administrators, both utility and nonutility.

Other big stats: Program administrators spent nearly $958 million on demand response programs in 2015, with the bulk coming from ratepayer funds. And more than 23 million metric tons of CO2 emissions were avoided by gas and electric demand-side management programs in 2015.

"Continuing investments in energy efficiency and demand response are a testament to the attractiveness of demand side management as a clean energy resource with many social and utility benefits," CEE said. Electric efficiency programs in the United States and Canada spent $7.3 billion, with the smaller gas program expenditures totaling $1.4 billion.

A study last year found utility spending levels on efficiency are tied to rate design. Utilities with decoupled rates spent more on efficiency, and ultimately saved more energy.

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Filed Under: Efficiency & Demand Response Corporate News
Top image credit: from Spruce Financial (used with permission)