Estimating National Carbon Savings Potential from Electricity Demand Reduction in Buildings

Panel: Energy and Environmental Policy: Planning for Greater Impacts

Authors:
Dean Gamble, ICF International
William Grayson, ICF International

Abstract

Because residential and commercial buildings contribute 39% of all CO2 emissions, reducing their carbon intensity will be an important component in reducing overall greenhouse gas levels. As a means to help evaluate the impact of national carbon policies on electricity demand, elasticity values were developed in two geographic regions for both the residential and commercial building sectors.

In contrast to previous studies, which utilized an econometric approach, this study attempted to derive elasticity values using a bottom-up approach. Using hourly energy simulations, residential and commercial baseline buildings were modeled and calibrated to approximately match national estimates of electricity consumption. A series of electricityreducing upgrades were then characterized by their incremental cost and savings potential. Potential long-term market adoption was then estimated for each package based upon payback periods under multiple scenarios with varying electricity rates. The results from this process were then condensed into elasticity values, derived from comparing the rate of change for electricity prices to the rate of change in energy savings associated with these prices.

This paper discusses the methodology for defining the elasticity functions and how these estimates compare to previous research. The results illustrate that this approach produces values comparable to previous studies and also reproduces variations by sector and geographic region as has been seen by others. With refinement, this approach can be exploited in analyses attempting to gauge the impact of national carbon policies on US electricity demand.