At the federal and state level, most energy efficiency programs measure energy efficiency based on how much energy an appliance or facility uses at its point of use (site). This “site-based” energy analysis is misleading because it does not account for the energy consumed in the production, generation, transmission and distribution of the energy that is consumed at the site. To best address the goals of improving energy efficiency and reducing emissions, a more accurate measurement that accounts for energy used or consumed is necessary. This is known as total energy efficiency, source-based or full life-cycle energy analysis.
For example, 70 percent of the total amount of energy involved in generating and transmitting electricity is lost by the time that electricity reaches a customer. By contrast, natural gas loses only about 10 percent of its usable energy. Thus, energy efficiency programs that are measured on a site-basis and do not account for total energy consumption are flawed. Such programs can mislead consumers, encourage wasteful energy consumption, cost more money and harm the environment.
Despite concerns about emissions and climate change, Congress has been unwilling to address this issue. In fact, current proposals to award tax incentives using site-based measurements would increase the harm caused by this flawed analysis.
There is no logical justification for site-based energy analysis. It is a flawed calculation that leads to flawed policies and decisions. Federal and state efficiency programs should amend their procedures to measure energy use and efficiency requiring that all segments of the full-fuel cycle be included and disclosed. All standard-setting organizations should require total energy efficiency analysis.
AGA Contact: Kathryn Clay, 202-824-7000, firstname.lastname@example.org.