Efficiency reduces infrastructure costs.

I have said before that the cost of the grid infrastructure depends mainly on peak power demand but I didn't have any examples to refer to - now I do. Recently I heard that a US electricity company called ISO New England has been able to defer grid upgrades due to reduced demand from their customers - saving $260 million [1].

The actual change in peak demand projection is small - only 514 MW which is less than 2% of their all time record peak demand in 2006 and the drop in actual energy usage is even smaller, only about 1%. None the less, even this has made a significant difference to costs.


These savings come after 4 years of state energy efficiency programs, with a total spend of $1.2 billion to date. That sounds a lot but these efficiency measures have reduced ISO New England customer bills by 3502 GWh so far, which at today's price of 15c/kWh represents another $525 million saved. Customers of other companies will have saved too [2].

Most of the efficiency savings were from energy efficient lighting but also energy star rated appliances, more efficient air conditioning systems and the like. 

In the UK it is the energy companies themselves who are supposed to run the energy efficiency schemes. Until December last year it was the CERT scheme - the Carbon Emissions Reductions Target. Energy companies have a carbon savings target which they can achieve in various ways - hence the offers of free loft insulation and cavity wall insulation and subsidised draught proofing materials and insulation at DIY stores. Under the CERT scheme in the UK companies have spent £5.5 billion, mainly on insulation. This is supposed to have saved 293 Mt CO2 which works out at £20/tonne CO2 saved. The CERT scheme is replaced by the Energy Companies Obligation (ECO) part of the Green Deal.

The CERT scheme has been primarily targeted at heating which does not affect peak time electricity so much, since most UK homes using electricity for heating have economy 7 and night storage heaters, though there some use small electric heaters for additional warmth.  Our peak electricity demand is a mixture of other uses: around a quarter due to lighting and another quarter due to cooking, the rest made up of smaller proportions of fridges and freezers, televisions and computer, washing machines and so on [5]. These are the areas we need to pay attention to in order to reduce our grid infrastructure costs.


[1] Energy Efficiency Saves New England $260 Million In Transmission Costs www,cleantechnica.com
[2] ISO New England Energy-efficiency forecast
[3] EIA Electric Power Monthly (electricity prices by state and sector)
[4] Carbon Emissions Reduction Target  (DECC)
[5] Household Electricity Survey A study of domestic electrical product usage  (DECC)