America now has a major new source of energy that could rival the contribution made to the economy by natural gas, coal, and nuclear power, according to a report released today by the American Council for an Energy-Efficient Economy (ACEEE), which concludes that up to about a quarter (22 percent) of current U.S. energy consumption could be replaced by what experts are calling “intelligent efficiency.”
The key to understanding the rise of “intelligent efficiency” is to stop thinking about energy efficiency simply in terms of individual devices (e.g., autos or refrigerators) and to start thinking about it in terms of complex systems (e.g., entire cities, transportation systems, and other networks) connected through Internet and computer technologies.
As the ACEEE report concludes: “System efficiency opportunities produce energy savings that dwarf component-based efficiency improvements by an order of magnitude. System efficiency is performance-based, optimizing the performance of the system overall—its components, their relationships to one another, and their relationships to human operators.
One of the cornerstones of systems-based efficiency is information and communication technologies, such as the Internet, affordable sensors, and computing capacity that are the foundation upon which systems efficiency are built… If homeowners and businesses were to take advantage of currently available information and communications technologies that enable system efficiencies, the United States could reduce its energy use by about 12-22 percent and realize tens or hundreds of billions of dollars in energy savings and productivity gains.”
R. Neal Elliott, associate director for research, ACEEE, said: “This is not your father’s device-driven approach to energy efficiency. A large portion of our past efficiency gains came from improvements in individual products, appliances, and equipment, such as light bulbs, electric motors, or cars and trucks. And while device-level technology improvements will continue to play an important role, looking ahead we must take a systems-based approach to dramatically scale up energy efficiency to meet our future energy challenges. Through intelligent efficiency, utility systems, interconnected cities, transportation systems, and communications networks can become the new normal across the United States and will undergird national and regional economies that, even in the face of increasingly scarce resources, grow and thrive.”
“There is resounding agreement that information and communications technology can make a huge impact in addressing the twin challenges of energy security and climate change,” said Stephen Harper, global director of environment and energy policy, Intel Corporation. “This new work by ACEEE should help both industry and government better understand ‘smart policies’ necessary to fully realize the potential of technology in this arena.”
“ACEEE’s report highlights that communications and digital technologies are transforming how efficiently we use energy, from appliances in customers’ homes, to cars and roads in transportation systems, to the power lines and generators in the electric system,” said Larry Plumb, executive director, Verizon. “It’s well understood that digital communications has boosted economic productivity. Now people are recognizing this technology also has a big role to play in addressing society’s long-term energy challenges.”
“As devices get smarter and the communications networks that connect those devices become more ubiquitous, the potential for efficiency gains that save energy and save businesses and families money are increasing,” said Arkadi Gerney, senior director for policy, Opower. “And, as this report shows, truly unlocking the potential of intelligent efficiency systems also depends on engaging energy consumers with smarter behavioral strategies and advanced analytics that turns an avalanche of data into actionable insight.”
“Johnson Controls has many real life examples where intelligent efficiency solutions have dramatically reduced building energy use, most notably at the Empire State Building,” said Clay Nesler, vice president, global energy and sustainability, building efficiency, Johnson Controls. “This practical and effective approach to improving and managing building energy efficiency can be cost-effectively applied to both new and existing commercial buildings.”
“This report is further evidence of the real revolution happening in our industry, the convergence of energy management and information that’s allowing companies to achieve significant savings of 30 percent or more,” said Paul Hamilton, vice president, government affairs, Schneider Electric. “It’s time for businesses and government to get involved and engaged in the partnerships and programs that will make this more of an everyday reality.”
Emerging Models of Intelligent Efficiency
- Residential Case Study: Smart Refrigerator Controls, Links to Electric Grid. Home appliances are increasingly making use of technology-centered efficiency such as smart controls and communication technologies to improve their efficiency levels. Some products, to meet upcoming federal efficiency standards for residential refrigerators, are making use of technologies such as variable speed compressors and fans that use sensors and controls to optimize operation, which may shave at least 5 percent from the device’s energy use. “Smart” appliances such as refrigerators will be able to communicate with the electric grid by receiving a real-time price signal from the utility and adjust their operations in response, opening up new opportunities for energy savings.
- Institution Case Study: Department of Defense (DOD). The Department of Defense has identified energy efficiency in its military installations, which account for about 25 percent of DOD’s total energy costs, as a key strategy to reduce energy costs, decrease the impact of fossil fuel price volatility, and boost installation energy security. DOD’s energy efficiency efforts are ramping up to achieve 30 percent energy savings by 2015, as required by Executive Order, and DOD has turned to several examples of people- and technology-centered intelligent efficiency to help reach this goal.
- Manufacturing Case Study: Plant-Wide Optimization. Manufacturing plants are full of complex systems, and managing energy consumption requires both a detailed understanding of real-time information about what the systems are doing and how these systems interact. New information technologies and advanced sensors and controls—examples of both people- and technology-centered intelligent efficiency—can improve system efficiencies and integrate controls across multiple, interacting systems. Both Schneider Electric and Rockwell Automation, for example, offer services to manufacturing firms to improve plant-wide optimization and increase both energy efficiency and productivity; they anticipate seeing as much as a 40 percent drop in the use of electricity and a 35 percent decline in oil and gas usage.
- Public Transportation Case Study: Priority Lanes, Dynamic Messaging, and Telecommuting. To relieve congestion on major highways, the Twin Cities metropolitan area (Minneapolis and St. Paul, Minnesota) is implementing a toll system using priority lanes with differential pricing, dynamic messaging about traffic, and information about public transit options (all examples of people-centered intelligent efficiency) and telecommuting (service-based intelligent efficiency). The dynamic message system communicates with drivers in real time about the availability of lanes, toll rates, travel speeds, and public transit alternatives. The eWorkPlace initiative focuses on getting employers to encourage the use of telecommuting and flexible work arrangements, which helps relieve traffic congestion while also reducing energy consumption.
- Community-wide Case Study: Envision Charlotte. Through a collaborative partnership, Duke Energy, Cisco, and Verizon are working on a project to dramatically raise energy awareness in Charlotte, North Carolina, by enabling people-centered intelligent efficiency. The initiative calls for interactive video monitors installed in the lobbies of downtown office buildings that display, in near real-time, the collective energy used by buildings in the city’s core. The monitors give tenants the information they need to better manage energy consumption in the offices, providing information about energy usage, energy efficiency ideas, and tales of the most efficient “energy champions” in the building. Duke Energy anticipates that the project will produce a 20 percent drop in power use by 2016.