Energy Efficiency

Fast Facts About
Energy Efficiency

Energy efficiency is providing the same or better service using less energy. Energy services are the benefits we derive from energy use, like illumination, thermal comfort, hot showers, and cold drinks.

Efficiency is not the same as conservation. Energy conservation is saving energy by using less of a service. Turning down the thermostat in winter is an example of conservation. It uses less energy, but the service isn’t the same (colder house). Insulating a house to lower heating costs is an example of energy efficiency. The service stays the same (warm house), but the furnace uses less energy to provide it.

Energy efficiency is a resource that can meet energy demand just like other energy resources such as coal, natural gas, nuclear, and solar. For example, providing lighting with a more efficient bulb saves electricity (negawatts). Unlike generated electricity, negawatts emit no greenhouse gases and require no power plants. In fact, energy efficiency is often the least expensive and most effective way to meet demand for energy services while reducing climate and environmental impacts.

Energy Efficiency Impacts

Energy Efficiency Methods

Small End-Use Changes Can Yield Big Upstream Savings

Efficiency improvements downstream, where we use energy services, can dramatically decrease the need for primary energy upstream.

Example 1: Energy System With Incandescent Light Bulb

• ~1% system efficiency (35% x 90% x 3%)

Primary Energy
100 units of coal

Energy Conversion
Coal Power Station and Grid

~35% efficient
Upstream

Energy Currency
Electricity

~90% efficient
Midstream

Useful Energy
Radiant Energy

~3% efficient incandescent
Downstream

Service Rendered
Illumination

 

Example 2: Energy System With Ultra-Efficient Light Bulb

• ~10% system efficiency (35% x 90% x 30%)
• 90% less coal required

Primary Energy
10 units of coal

Energy Conversion
Coal Power Station and Grid

~35% efficient
Upstream

Energy Currency
Electricity

~90% efficient
Midstream

Useful Energy
Radiant Energy

~30% efficient LED
Downstream

Service Rendered
Illumination

Energy Efficiency Can Be Applied Anywhere!

Efficiency measures can save energy in any part of the energy system, in any sector, at any point. Understanding where and how energy is used can provide a roadmap to finding and prioritizing potential energy savings.

Waste in the Energy System

The opportunity for energy efficiency is massive. The world's energy system is only about 40% efficient, meaning that almost 60% of energy inputs are wasted (the rejected energy in light grey below). The U.S. energy system is even less efficient, wasting almost 70% of energy inputs. The World Energy Flow diagram reveals significant efficiency opportunities in buildings (residential and commercial), industry, and transportation.

Energy Use by Sector

Note that the data for the world is total final energy consumption by sector, and the data for the U.S. is primary energy consumption by sector. Total final energy consumption is only the energy to meet demand and does not include the upstream losses. Primary energy consumption is the total energy supply to each sector, including losses in the energy system as well as energy to meet demand. Unfortunately, primary energy consumption by sector isn't tracked for the world.

Big Opportunities for Energy Efficiency

Buildings

• Buildings: Create better thermal barriers (e.g., high performance windows, insulation)
• Lighting: Use natural light, LEDs, and motion sensor controls
• Heating and cooling: Replace natural gas or electric resistance heating with heat pumps or efficient HVAC systems
• Appliances: Replace old stoves, dryers, and water heaters with efficient, electric models; reduce standby losses

Industry

• Electrify process heat (see our Industry Decarbonization page)
• Improve maintenance and monitoring of energy-intensive processes
• Systematically recover waste heat
• Design pipes in pumping systems to reduce friction (use wider, shorter, straighter pipes)
• Use variable speed drives instead of pump/control valve systems
• Improve valves and fittings

Transportation

• Plan neighborhoods and cities to reduce reliance on personal vehicles (e.g., locate goods and services near housing, locate housing near public transit)
• Expand public transportation and bicycle infrastructure
• Reduce vehicle weight to improve fuel efficiency (e.g., carbon fiber composites)
• Design vehicles with less aerodynamic drag 
• Use low rolling resistance tires and properly inflate tires
• Electrify personal vehicles, trains, trucks, and buses

For energy efficiency opportunities on an individual scale, visit our Decarbonize Your Life page.

Policy Instruments for Improving Energy Efficiency

Government Efficiency Standards

• Building codes
• Fuel efficiency standards for vehicles
• Appliance efficiency standards

Information and Education

• Public information campaigns
• Voluntary standards with third-party verification and labeling (e.g., ENERGY STAR in the U.S.)

Financial Incentives

• Tax credits or cash rebates for energy efficient products
• Low-income weatherization programs

Utility-based Programs

• Energy audits
• Contractor referrals
• Financial incentives (e.g., rebates for installing efficient equipment)
• Direct installation of efficiency upgrades by utility contractors
• Inclusive utility investment (e.g., Pay as You Save®)

Limitations on the Energy Efficiency Resource

• Technical potential: what is technologically feasible
• Economic potential: what is economically feasible and cost effective
• Achievable potential: what is realistic and acceptable for people’s comfort and convenience 

Technical and economic potential tend to increase over time with investment in research and development.

Climate Impact: Low

• Reduces overall GHG emissions

Environmental Impact: Low

• Reduces overall environmental impacts

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