Stronger Together: Efficiency With Instead of Efficiency First

March 6, 2020 | Jake Duncan

As the demand for climate action continues to ramp up, more cities, businesses, and utilities are discussing their decarbonization strategies for the years ahead. However, achieving a fully decarbonized energy system is a colossal task, requiring revolutionary innovation in engineering, business models, and policy, as well as a new scale of cooperation between utilities, the private sector, and the public sector. Robust decarbonization means transforming energy supply (to 100% renewable energy available all year round, everywhere) and demand (to smart, efficient, and all-electric buildings and vehicles). To advance these efforts, we will need to shift the way building owners and tenants, city leaders, utility representatives, and communities think about buildings and the role of energy efficiency.

Illustration by Rita Perez.

A New Paradigm is Necessary to Meet Our Goals

“Efficiency first” has long been the mantra of many energy advocates, including IMT—that is, reduce consumption as much as you can first, then deal with delivering clean power. This conventional thinking treats efficiency as a standalone option, presenting it as step one in a linear loading order. However, the game is changing. The rapidly falling cost of renewables and storage, along with a push for electrification, is drastically changing the way buildings and the grid operate. The equation is not as simple as it used to be.

We must change the dialogue to think of buildings as part of a system, not islands whose choices have no impact on anyone but themselves. Applying a systems thinking perspective reveals that clean energy options can be most impactful when combined.

For instance, consider electrification. Transitioning all building systems to be powered with electricity instead of with fossil fuels on its own may result in increased consumption of dirty electricity since depending on intermittent renewables like wind and solar means clean energy is not available during all hours of the day. New electricity demand may still be consuming fossil fuel-based electricity as the grid cleans. Increased demand from electrification also means we have to invest in substantially more renewables and associated infrastructure to power the economy, which can be costly to ratepayers and stretch the limits of our supply chains. For example, in the case of New England, electrification may require the region to build renewables at a rate as much at 8 times the current rate to meet their climate goals.

However, if we layer energy efficiency with renewables and electrification, we see these approaches build on each other.  Efficiency reduces total grid needs and yields savings now while we build renewables as fast as possible to power the electrifying building and transportation sectors, which are now minimized and renewable powered.

Instead of thinking of projects as either an electrification project, an efficiency project, or a solar installation, a systems thinking approach shows us that they are all decarbonization projects. By combining the elements of decarbonization (electrification, efficiency, renewables, and demand management) in each project or program, we layer each approach’s strengths and weaknesses to create the strongest decarbonization approach.

(Stay tuned: We’ll dig into the complexity of electrification in an upcoming blog.)

What does systems thinking mean for cities and buildings?

These issues are complex. IMT’s experts spent more than a year diving into how systems thinking can be applied to buildings and energy efficiency. Over the next three months, we’ll share our findings on the necessary shifts, alongside the associated challenges and opportunities that this evolution to systems thinking brings for buildings. These blogs will tackle pressing questions in three main topics:

Electrification of buildings and vehicles:

  • What does it mean for buildings and the grid?
  • How can cities enable electrification through policy?
  • How do efficiency and electrification complement each other?

Renewable energy development:

  • What are the limits of renewables for individual buildings and the grid?
  • What does an optimized approach to developing renewables look like and how can it accelerate renewable adoption and fossil fuel retirement?
  • How can building owners, utilities and cities combine efficiency projects and renewable projects?

The role of demand management in buildings:

  • How building owners, utilities, and cities view buildings as a decarbonization asset as opposed to a liability?
  • What is the cutting-edge value of buildings to align their operations with renewable energy production to encourage renewable use and growth?

The most effective path to decarbonization will require using every tool in the toolbox as strategically as possible, leveraging each resource in tandem with the others. We’ve spent a lot of time thinking about the role of energy efficiency in a systems-thinking context, but we want to hear from you as to where you want to dig in next. Of the following topics, which would you most like to see our next blog tackle:

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For now, check out this blog by the American Council for an Energy Efficient Economy that explores the power of combining efficiency, solar, and storage through utility programs. 

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