Energy efficiency isn’t about giving things up. It’s about doing things better and doing more with less energy. It’s the genius of technological innovation—maximizing performance by boosting efficiency. Because markets alone are often inadequate in eliminating energy waste, public policy, regulation, and incentives are key components of a clean, efficient energy future.

ELECTRICITY PRODUCTION

The gross inefficiency of electricity production can be reduced by moving from coal to natural gas and renewable energy. The best natural gas turbines are based on modern jet-engine technology and are vastly more energy efficient than coal plants. When coupled with a thermal host like a city or a large industry, one power plant can provide both electricity and heat—combined-heat-and-power—increasing efficiency even further.

Producing electricity from renewables, with the exception of bio-based resources, is extremely efficient. It causes minimal environmental damage, and despite high upfront capital costs, carries a low price tag in the long term. Producing electricity from fossil fuels, on the other hand, is an energy-intensive process, rife with inefficiencies.

Moving electricity from the power generator to the consumer—transmission—is also a problem. The further it moves and the more resistance it meets from sagging powerlines, switches, substations, and the physical condition of the wires, the more electricity is lost. In general, about 7 percent of electricity is lost in transmission.

A more diverse mix of power that includes smaller, more efficient generation facilities, like combined-heat-and-power and solar collectors, that are closer to where the power is used, reduces waste in transmission.

By carefully investing now to increase the efficiency of the system, the per-unit cost of electricity will hold steady or decrease over time, minimizing rate increases for customers. Efficiency investment now will also avoid the need to later invest large amounts in traditional power plants like coal and nuclear. Making what we have more efficient and judiciously and incrementally adding clean energy to the mix is far cheaper than waiting until there is a need for huge new power production capacity that requires enormous new investment.

BUILDINGS

Increasing efficiency in buildings is particularly important because of their long lifespan; an inefficient building can waste energy for decades. Policy makers agree: minimum requirements for energy-efficient design and construction for new buildings and large-scale renovations are set by state energy codes. A national initiative is under way through the American Recovery and Reinvestment Act for states to adopt specific standardized residential and commercial energy codes that would increase the minimum energy efficiency of newly constructed buildings. All 50 states have agreed to participate in the program and work to achieve 90 percent statewide compliance by 2017. Education, training, and other mechanisms to increase compliance will be needed. In addition, states should periodically update their energy codes to ensure they are incorporating new technology and building practices.

Existing buildings also represent a huge opportunity for energy savings. Over the next 30 years roughly half of all buildings in the United States will need renovation. Improving our existing buildings not only saves money for building owners and operators in the long run, but also creates jobs and boosts local economies. States should provide energy efficiency standards or guidelines for renovations. Mechanisms like utility energy efficiency programs can provide incentives and rebates to help utilities and states meet energy efficiency improvement goals.

INDUSTRY

Because industrial users consume such large amounts of energy, this sector represents a great opportunity to do more with less. Policies can help spur investment in industrial efficiency, decreasing our overall energy use, saving money for the companies, and creating jobs across America.

Even though industrial efficiency is cost-effective and lowers the overall costs of production for a company, industrial facilities are often focused on the near-term financial analysis, ignoring midterm cost-effective measures such as efficiency because of their up-front investment costs. Government programs and policy mechanisms have demonstrated the opportunity to greatly increase industrial efficiency.

For example, many states have established efficiency targets for industrial users. Both state and federal agencies have successfully improved industrial sector efficiency by providing energy assessments and training tools, such as those in the Energy Star industrial program and DOE’s Save Energy Now programs. Industrial energy consumers have developed energy management programs and trained energy personnel through programs such as the Environmental Protection Agency’s Energy Star for Industry.

Another possibility: monetary incentives from either government or from a third party, such as a purchaser, who wants to reduce energy consumption in industrial production processes. Additional gains can be made in industrial efficiency by implementing policies to increase research and development in energy saving measures and workforce development training that focuses on the benefits of industrial energy efficiency.

TRANSPORTATION

The internal combustion engine—complicated, resource-intensive—is getting more efficient, and public policy is pushing it there. When fully enacted in 2025, new federal fuel efficiency standards will save the average car owner $8,200 in gasoline over the life of the car, and save the country the equivalent of all the oil we import from Saudi Arabia and Iraq annually. In addition, new heavy-duty truck standards will improve efficiency by 9 to 25 percent, a good first step.

Making gas-powered vehicles is important, but we can squeeze much more efficiency out of the transportation system. Zero-oil electric vehicles (EVs) provide an important part of that solution, and Congress should enact comprehensive EV policy to spur successful and rapid transition from gas to electricity.

But electric vehicles are still inefficient if they are stuck in traffic. Cities, regions, and states can help support efficient use of land by eliminating subsidies for sprawling development on the edge of town while reducing barriers to development in areas where people have the option to drive shorter distances, walk, bike, or take transit. In regions where new transit lines are being built, it’s important to maximize development to allow access by more people. And a larger portion of transportation dollars needs to be directed to creative multi-modal projects like using buses to increase the capacity of a highway, retiming stop lights to improve flow, and adding bike lanes and trails to help people connect in their community.

Energy efficiency isn’t about giving things up. It’s about doing things better and doing more with less energy.