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Energy Efficiency: Saving energy, money, and carbon emissions

A new report from the Alliance for Industrial Efficiency demonstrates that states could help the industrial sector seize enormous opportunities to cut carbon dioxide (CO2) emissions while saving money and making manufacturers more competitive. In an increasingly global marketplace, states can help their manufacturers be more competitive by lowering their operating costs and increasing productivity and innovation – through energy efficiency.

By investing in industrial energy efficiency (IEE) and combined heat and power (CHP) technologies, states can cut CO2 emissions by 174.5 million short tons in 2030 – equal to the emissions from 46 coal-fired power plants! And when states help manufacturers reduce their energy use and cut their carbon emissions in this way, this report shows that it would save businesses $298 billion in avoided electricity purchases.

Because industrial companies are large users of electricity, their energy use translates to higher electricity demand on utilities – and higher carbon emissions. This report, which ranks states on their potential for IEE and CHP to reduce CO2 emissions, relies on an analysis from the American Council for an Energy-Efficient Economy’s (ACEEE) SUPR 2 calculator. The analysis assumes a scenario in which each state achieves an annual 1.5% electricity savings per year through 2030 and installs a portion of its technical potential for new CHP.

States with significant manufacturing sectors stand to gain the most total carbon emissions reductions through investments in IEE and CHP. The top ten states that would experience the greatest total CO2 emission reductions from energy-efficiency improvements in the industrial sector are: Texas, Ohio, Illinois, Indiana, Pennsylvania, Kentucky, Michigan, California, Georgia, and Alabama.

Less populated states can also realize major benefits from IEE and CHP. The top ten states that could make the largest relative emission reductions (tons per capita) from efficiency improvements in the industrial sector are: Wyoming, Kentucky, Indiana, West Virginia, Iowa, Alabama, North Dakota, Nebraska, Wisconsin, and Louisiana. This analysis demonstrates that less populous states, such as Wyoming and North Dakota, show great emission-reduction potential from IEE and CHP, despite their small populations. Several states like Kentucky, Indiana, and Alabama – which are also in the top ten for absolute emission reductions – have large per capita and significant total emission-reduction potential.

Nationwide, the benefits of IEE and CHP are enormous. This report finds that IEE and CHP can achieve nearly one-third (29 percent) of the national emission reductions called for under the Environmental Protection Agency’s Clean Power Plan (CPP). The CPP allows states to use IEE and CHP to meet their emission targets. Despite the Supreme Court stay of the rule, several states are choosing to continue to work to cut CO2 emissions from power plants and explore pathways to compliance. Moreover, even absent the CPP, states will undoubtedly need to identify strategies for reducing CO2 emissions in the foreseeable future. In light of this tremendous potential, IEE should be a cornerstone of every state’s plan to reduce CO2 emissions in the power sector.

State policymakers, manufacturers, utilities, and others should seize the significant opportunity for IEE and resulting cost savings and emission reductions, which this report demonstrates. This is particularly important as states consider how to implement the CPP and make other plans for the evolving electricity sector. As this report shows, IEE and CHP represent not only an opportunity for achieving significant, low-cost emission reductions, but also making each state’s manufacturing sector more competitive.  As the country debates how to compete in a global economy and create jobs, states should adopt forward-thinking policies now that spur the installation of smart, efficient technologies like CHP and efficiency at America’s factories.

This blog post was written by lead author of the report and Senior Research Associate, Alexandra Rekkas. Read more about the new report, download the state factsheets, and more here


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