John A. “Skip” LaitnerAmerican Council for an Energy-Efficient Economy (ACEEE)

Increasing Energy Efficiency Through Collaborative Strategies

2012 NASCSP Annual Conference and2012 DOE Weatherization Assistance Program

State Managers’ Meeting

September 12, 2012Buckhead - Atlanta, GA

A Revitalized Efficiency Perspective:The Intersection of Behavior, Technology, and

the Underserved Community

A Working Hypothesis in the Global Economy

The complete economic recovery and robust development of our long-term global prosperity will not be possible without hefty increases in productive investment and greater levels of resource and energy efficiency – all enabled by a shift in our behaviors, our social institutions and our culture. Neither the market nor the public can get it done on their own. Only through a process of greater collaboration will we have the possibility of returning to prosperity.

And as we are reminded by my favorite American philosopher, Gary Larson, small differences in assumptions can lead to very big differences in outcomes!!

With Apologies to Gary Larson. . . .

If we do make the wrong assumptions, and if we don’t get it right, we may have this. . .

A smart ass cactus speaking to us on behalf of Mother Nature Herself!

With These Opening Observations· The past is consistent with many, many different futures

– depending on the choices we have yet to make.· New research suggests the U.S. now converts only

~14% of all the energy it consumes into useful work, or into transforming matter into the goods and services needed to maintain our economy (Laitner 2012).

· In short, we waste 86% of all energy used to power our economy, and that magnitude of waste imposes a huge array of costs that constrains our larger well-being.

· If we are to ensure a robust and prosperous economy, we need to triple and quadruple our current level of energy efficiency.

· The recent ACEEE report, “The Long-Term Energy Efficiency Potential: What the Evidence Suggests,” shows how slashing energy use by 40 to 60% — through highly cost-effective efficiency investments — could generate up to 2 million jobs while saving residential and business consumers about $2,600 per household annually.

· The really big insight? Instead of tiny increments, the U.S. will be better off “Thinking Big” about energy efficiency and energy productivity, rather than relying on the usual set of very costly and conventional energy resources.

· The other critical insight? All of the members of our underserved communities absolutely need to be a part of the solution; or our combined efforts will fall short. . . .

Jumping to the End of the Story

Source: The Long-Term Energy Efficiency Potential: What the Evidence Suggests (2012). Washington, DC: ACEEE. http://www.aceee.org/press/2012/01/aceee-report-us-better-thinking-big-

From Wikipedia: In economics, disintermediation is the removal of intermediaries in a supply chain, or "cutting out the middleman". Instead of going through traditional distribution channels, which had some type of intermediate (such as a distributor, wholesaler, broker, or agent), companies may now deal with every customer directly, for example via the Internet. One important factor is a drop in the cost of servicing customers directly.

Disintermediation at Work

Comparing Different OutcomesComparing Electricity Sales and Mail Delivery

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0.90

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1.10

1.20

1.30

1.40

1.50

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What if we substitute the word “kilowatt-hours” for “pieces of mail” as we examine the future?

U.S. Electricity Sales

U.S. Postal Service Mail Volume

Source: US Energy Information Administration and US Postal Service.

0.80

1.00

1.20

1.40

1.60

1.80

2.00

2.20

2.40

Ind

ex

(1

97

3 =

1.0

0)

What if we substitute the word “kilowatt-hours” for “records sold per person”?

U.S. Electricity Sales

Records Sold Per Person

Source: US Energy Information Administration and Data on Record Sales Per Person.

Napster Begins

Comparing Different OutcomesComparing Electricity Sales and Record Sales

0.60

0.80

1.00

1.20

1.40

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1.80

Ind

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4 =

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What if we substitute the word “kilowatt-hours” for “local calls”?

U.S. Electricity Sales

Local Calls Originating

Source: US Energy Information Administration and Data on Local Calls from U.S. Statistical Abstract.

More than 100 Million Cell Phones

Comparing Different OutcomesComparing Electricity Sales and Local Phone Calls

Shifting Perceptions and Use Patterns· An October 2011 national poll of 3,400 consumers

conducted by the University of Texas at Austin revealed deep discontent among U.S. consumers over the direction the country is headed on energy.

· Oncor, CenterPoint Energy, IBM, Landis+Gyr, Itron, GE, San Diego Gas & Electric, and Tendril are founding partners of the Biggest Energy Saver Campaign – an online community to explore ways that might engage customers to learn how smart technology can help reduce their electricity bill.

· Across all participants, the average savings was just under 8%. The top 10% of the participants achieved a whopping 26% savings.

Shifting Perceptions and Use Patterns· Verizon announced home monitoring and control service

that enables customers to remotely check on their homes, lights, thermostats, appliances and energy use.

· A study released by Brattle Group economists and energy analysts reveals energy efficiency improvements could lower U.S. electricity consumption by 5-15%. . . .

· In short, utilities can no longer bank on ever-growing demand; a major shift is under way and an increasing number of businesses are finding ways to profit when people use less power.

· The new market will be in providing not the commodity we call energy, but value-added energy services.

While the imperative and scale of the energy efficiency resource remains large, we might begin, first, by exploring possibilities through

feedback mechanisms in our nation’s households, and especially in our

underserved communities. . . .

Energy Efficiency: Making the Invisible Visible

“Direct” Feedback(Provided Real Time)

Enhanced Billing

Household-specific info,

advice

Estimated Feedback

Web-based energy audits with info on

ongoing basis

Daily/Weekly

Feedback

Household-specific info,

advise on daily or

weekly basis

Real-Time Feedback

Real-time premise level

info

Real-Time Plus

Feedback

Real-time info down to the

appliance level3.8%

6.8%

8.4%9.2%

12.0%

Annu

al P

erce

nt S

avin

gs

“Indirect” Feedback(Provided after Consumption Occurs)

Residential Feedback ApproachesAverage Household Electricity Savings (4-12%) by Feedback Type*

Plus Application of Smart Social

Science Insights

Potential Resource Savings:

20 to 35%

Real-Time Plus Feedback w/

Smart Program Design

Ehrhardt-Martinez, K., Donnelly, K.A., and Laitner, J.A. 2010A meta-review of 57 different feedback programs

Strategies to Catalyze Behaviors?Let’s Look to the TIME Model*

• Targeting: scale, people, and actions• Informing: consumers, producers, policies, and

programs• Motivating: norms, networks, goals and

commitments• Empowering: dissolution of the financial and

structural barriers to provide and enable significantly better services and choices

*Source: Adapted from Karen Ehrhardt-Martinez

Empowering: Removing Barriers to Provide and Enable Better Choices

The Example of Choice ArchitectureL Choice architecture is about creating a context in

which people are likely to make better decisions – decision that will make the choosers much better off, as judged by themselves. (Thaler and Sunstein 2008)

L Overcoming inertia and the status quo biasL Hence, the BECC Low-Carbon Lunch Experiment

undertaken by Karen Ehrhardt-Martinez in 2009

*

* BECC is the Behavior, Energy, and Climate Change Conference (see www.BECCConference.org), this year taking place November 12-14, 2012 in Sacramento, CA.

The 2009 BECC Low-Carbon Lunch(a conference new default)

ACEEE Conference

StandardBECC 2007

BECC 2009

Meat-Based Lunch 90-95% 83% 20%

Vegetarian Lunch 5-10% 17% 80%

Hence, a Large Indirect Savings

· Meat production is responsible for 18% of the global greenhouse gas emissions (Pew Commission 2008)

· Omnivores contribute 7 times the GHG emissions than vegans

The Key Take-Aways· The energy efficiency resource is larger and more

necessary to develop than is generally understood· Engaging, empowering and motivating consumers,

especially among underserved communities, is a critical first step in building large-scale savings.

· For deep, and lasting change, a layered approach to changing behavior is important – using multiple methods and means of reaching people, as individuals, but also as family members, neighbors, or co-workers!

· The new utility business model shifts from the sale of commodities to providing value-added services, and does so in ways that save ratepayers money and generate positive returns for investors.

For further information and citations to the resources and references cited:

John A. “Skip” Laitnerc: (571) 332-9434

email: jslaitner@aceee.org

See our eBook on the behavior resource:

Karen Ehrhardt-Martinez and John A. “Skip” Laitner, Editors

People-Centered Initiatives for Increasing Energy Savings

Washington, DC: American Council for an Energy-Efficient Economy

www.aceee.org/node/9275 

See also my Desert Year Blog:

$3 Trillion Thought Experiment for Rio+20 http://www.realclimateeconomics.org/wp/archives/1302