Electrification and efficiency: crafting an enduring relationship

(ACEEE blog, 31 Jan 2019) As more states and cities set aggressive policies toward a carbon-free future, the energy industry is abuzz with the concept of electrification. What does this have to do with energy efficiency? A lot!

Although some people may assume that efficiency’s reduction in electric use conflicts with electrification’s increase in load, in fact, energy efficiency is central to many electrification strategies. Like many relationships, it’s complicated. If done right, electrification presents opportunities to advance energy efficiency and its many benefits. But if not done carefully, it also poses challenges. Here we briefly explore the relationship between electrification and efficiency and highlight some upcoming ACEEE research and outreach that will further explore the topic.

What is electrification? What is its relationship with energy efficiency? 

Electrification means fully or partially switching from technologies that directly use fossil fuel to those that use electricity. As electricity is increasingly produced from low-carbon sources such as wind and solar, shifting from technologies that use fossil fuels to those that use electricity will often reduce emissions. Electrification also increases load for electric utilities, making it a potential win-win for the environment and electric utilities’ bottom lines. 

A growing set of energy efficiency opportunities in our buildings, transportation, and industrial sectors save energy by switching from inefficient fossil fuel technologies to more-efficient electric ones while often also providing economic, environmental, health, and equity benefits. ACEEE sees electrification as a form of energy efficiency when it saves energy (in total Btus), saves money, and reduces emissions.  

The Regulatory Assistance Project (RAP) argues that electrification is beneficial or in the public interest when it meets one or more of the following conditions without adversely affecting the other two: saving consumers money over the long run; enabling better grid management; and reducing negative environmental impacts.  

But not all electrification is beneficial or energy efficient. For example, electric resistance heat is generally neither because it is often inefficient and can be expensive to run. Local conditions matter, including policies, economics of fuel options, weather, and regional grid mix or load profiles. To a large extent, each state will need to chart its own policies for electrification and its relationship with energy efficiency based on analysis of local market conditions, resource planning, and stakeholder engagement. 

So, electrification is sometimes beneficial and sometimes also a form of energy efficiency:

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ACEEE blog, 31 Jan 2019: Electrification and efficiency: crafting an enduring relationship