A 2018 paper by Amory Lovins at the Rocky Mountain Institute argues that economic models wrongly identify “energy efficiency”—using less energy to power the same activities—as a limited and dwindling resource. Current models assume that once a certain amount of energy saving is achieved, the potential for further savings diminishes. It is a common misconception that remaining energy savings can only be achieved at ever high costs when in fact there remain ample opportunities for energy efficiency and peak reduction in homes and offices, through both passive and active measures.
Lovins argues that the premise of dwindling energy efficiency is mistaken on two counts. First, additional savings from energy efficiency do not have to come just from new products like better air conditioners. Additional savings can come from “artfully choosing, combining, sequencing, and timing fewer and simpler widgets to achieve bigger savings and more co-benefits.” This approach—which Lovins dubs “integrative design”—is also cheaper.
Lovins offers numerous examples of the integrative approach in action for buildings:
Timing deep retrofits to coincide with planned renovations of HVAC systems and glazing can achieve larger savings with smaller capital expenditures.
Buildings can achieve greater energy savings without additional technologies being purchased if they optimize daylighting, airflow, heat transfer, and other similar factors.
A 2013 paper by L.D. Danny Harvey at the University of Toronto found that meeting the Passive House Standard—which sets temperature, load, and comfort standards on buildings—achieves a reduction in heating load by a factor of 5 to 10 for an additional cost that ranges from 0 to16 percent of the construction costs of a reference building.
Apart from Lovins’ examples of more passive measures, there is substantial untapped savings from more aggressive building retrofits. The American Council for an Energy-Efficient Economy (ACEEE) argues for mandatory building performance standards as a powerful policy tool for energy and emission reductions. ACEEE states that given the current pace of energy efficiency upgrades, it will take more than 500 years to retrofit all U.S. housing and more than 60 years to retrofit commercial buildings. It offers several examples of building performance standards that have been successfully implemented—including in Tokyo, Japan and Boulder, Colorado.
A recent study released by the U.S. Department of Energy (DOE) lays out a policy framework for buildings to actively interact with the electric grid through smart technology, and thus reduce energy usage and shift demand away from peak hours. The study incorporates passive and active measures. One example is shifting demand by having grid-connected water heaters pre-heat during off-peak hours. DOE also recommends that building codes should be adapted to incorporate such demand-shifting measures and facilitate these types of communication between buildings and the grid.
In addition to updating regulations and building codes, policymakers can alter fiscal rules to institutionalize regular active and passive efficiency upgrades as a key goal of public investment and procurement. One possibility is to allow public spending on efficiency upgrades to proceed without offsetting increases in tax rates since the benefit of that spending is a reduction in future
