Emiciency

The first use of the term ‘emiciency’ came from The Electricity Journal paper “Environmentally beneficial electrification: The dawn of ‘emissions efficiency,’” published by Keith Dennis, Ken Colburn, and Jim Lazar on August 19, 2016. The idea being that the electricity grid is changing dramatically along with environmental goals, so policy thinking needs to change along with it or there is the chance that we will end up with poor metrics that don’t set us up for success in meeting policy goals. While the Inflation Reduction Act is promoting efficient electrification of energy end uses—such as space heating, water heating, and transportation— an incorporation of the concept for emiciency into our metrics thinking is needed to achieve emissions-reduction goals.

This concept, the electrification of energy end uses that have been powered by other fuels (natural gas, propane, gasoline, coal, wood, diesel, or fuel oil) to create both the potential for, and realized local emissions reductions, is called “environmentally beneficial electrification.”

The ideal use for emiciency is when revisiting traditional energy efficiency metrics and accounting methodologies to identify emissions improvements that come from adding electric load. Specifically, it is timely to consider whether reduced electricity consumption (i.e., kilowatt-hours, or kWh) is the right path to a low-carbon future when, in fact, substitution of electricity for fossil fuels may in some cases increase electricity consumption.

By assessing the emissions associated with various ways to power end uses as opposed to simply the number of kWh consumed emissions efficiency or “emiciency” may be as or more important than energy efficiency moving forward. Beyond ensuring that our efficiency metrics and policies promote positive environmental outcomes and produce less CO2, it is also imperative that they not create unintentional backsliding by discouraging the electrification of loads that are less carbon-intensive than existing practices. Replacing a fuel oil heating system in a single-family residence with electric heat pump technology, for example, would typically reduce emissions, improve comfort, and save the owner money. But such replacements may not be encouraged or adequately understood under existing regulatory frameworks.

Whether as a matter of policy or strategy, optimizing emissions reductions hinges on the development of easy-to-use metrics that capture the cross-sector emissions reductions associated with environmentally beneficial electrification. Environmentally beneficial electrification is not only essential to meeting environmental goals, it also provides a significant economic opportunity, and we need to consider pathways, policies, and actions to foster it. Of paramount importance initially is to identify how progress should be measured.

Consider the energy efficiency of an electric water heater in terms of gallons of hot water produced per kWh, or an electric vehicle in terms of miles driven per kWh. Typically, their energy efficiency will not change significantly over their operating lifetimes: An electric vehicle produced today will operate with roughly the same miles-per-kWh in 10 years as it does now. However, due to the U.S. regulatory framework that ensures declining emissions intensity of the grid over time these devices will become more “emissions efficient” over time; the electric vehicle will emit less CO2 per mile in 10 years than it does today. Additionally, both electric vehicles and electric water heaters can be flexibly managed to charge when low-cost or renewable energy is available, providing additional opportunity to secure economic and environmental benefits. This is why programs to beneficially electrify are so important, they create future emissions gains, which with a little work, could even be booked today as a part of the state and federal efficiency programs in the same fashion as traditional efficiency metrics book energy savings as deemed by technical reference manuals.

Traditionally, state and federal energy efficiency efforts for electricity have focused on reducing kWh consumed by electricity end users and separately on reducing therms consumed by natural gas end users and gallons consumed by petroleum end users. Motivated largely by the oil shocks of the 1970s, early policies essentially sought to conserve primary energy, including shifting loads from electricity (typically produced from fossil fuels at less than 40 percent efficiency) to direct use of natural gas (at efficiencies of 60 percent to 80 percent). More recently, as climate threats have become evident, the goal of reducing emissions has become as important as primary energy conservation. This change in focus—from seeking fewer kWh used to reduce use to fewer tons of CO2emitted to reduce emissions—has also been paralleled by increased natural gas generation, which emits about half as much CO2 as coal, and greater penetration of renewable energy resources, which typically emit no greenhouse gases.

A kWh of energy savings reported by an energy efficiency program or consumed by an electrical product might have been produced by a number of generation sources, be it wind, solar, nuclear, gas, hydro, or coal. These savings may be cost-effective and desirable because all electricity has a cost, but the direct economic cost is only a part of the emiciency picture.

If policies like energy efficiency resource standards, appliance efficiency standards, rebates, and other incentives are measured simply with kWh consumption metrics, we may miss out on many cost-effective GHG emissions-reduction opportunities from fuel conversions. We stand on the verge of massive opportunities for environmentally beneficial electrification but recognizing and realizing those opportunities will not be achieved through an indiscriminate focus on reducing kWh consumption.

Despite this change in focus, kWh saved through energy efficiency is regularly applied as a proxy for GHG emissions reductions because it’s “the way we have always done it.” This is a case where conventional wisdom lacks wisdom: Energy efficiency is an inadequate metric to measure technology performance when it comes to emissions since more energy saved is increasingly fewer emissions saved, undermining the rationale for requiring or even incentivizing the savings.

When accounting for emissions associated with the addition of new electric load, it’s important to recognize that the emissions intensity of the grid is changing with time. Current emissions accounting methods typically reflect existing generation, often with outdated data. Such static approaches do not reflect the impacts of the grid’s continuing fuel mix and technology improvements that reduce emissions over time. In considering calculations that utilize power sector emissions on a going-forward basis, state air quality agencies, energy efficiency program administrators, and other interested parties would be applying emissions factors (and savings) that reflect the changing nature of the generation fleet that will be serving the new electric loads. As environmentally beneficial electrification is implemented, account for the emissions impacts that result from displaced direct combustion of fossil fuel.

Metrics that successfully account for environmentally beneficial electrification should include the impact of the entire project and allow for the concept of enabled future emissions reductions. Quantification should, of course, be mindful to balance the need for accuracy with the cost of measurement and verification. State air quality agencies, partnering with state energy offices, energy efficiency program administrators, and other interested parties should develop and apply “deemed emissions reductions” just as “deemed kWh savings” are often applied today in the evaluation, measurement, and verification of energy efficiency programs.

Move towards emissions efficiency in addition to energy efficiency (i.e., kWh saved) as a metric for projects targeting GHG emissions reductions. As noted earlier, a heat pump water heater may reduce kWh by 50 percent compared to a resistance water heater, but a heat pump water heater controlled so as to have its load met by solar during the middle hours of the evening may reduce emissions 75 percent or more. The energy efficiency of the former is good, but the emissions efficiency of the latter is far better. It is important, particularly to state air quality agencies, to capture this “emiciency” opportunity in future program and policy planning.

Traditional energy efficiency metrics are increasingly obsolete, however. Staunch adherence to efficiency measured by energy savings alone, for instance, overlooks numerous opportunities to also reduce emissions through fuel conversions from fossil energy to efficient electric technologies powered by an increasing clean generation fleet, or from higher-emitting to lower-emitting fossil energy sources. The electric system is dynamic, and evaluating the impacts and benefits of electricity use is not a simple task. Metrics matter greatly, and it is important that they are effective and accurate. No single metric can be pursued in isolation, whether it is energy efficiency, emissions efficiency, or any other individual metric. It is necessary to look at the system broadly, develop priorities—including safety, reliability, affordability, compliance with environmental regulations, and economic development—and optimize the integrated system accordingly.

To simultaneously maximize cost savings and GHG emissions reductions, new metrics must incorporate not only energy-saving technologies—increasing the performance-per-kWh of devices—but also the processes, procedures, and policies governing how and when those devices use electricity and which of them currently powered by fossil fuel combustion might instead be electrified. Our economy and our climate demand that we use both by pursuing optimal emissions efficiency strategies.