Was Energy Efficiency Dropped From the Clean Power Plan?

MORE FOR LESS: Understand energy efficiency, and you’ll understand how the Clean Power Plan works.

On Earth, August 17, 2015. Image credit: Ekopedia

The draft plan from last summer assumed that states would use four primary strategies to reduce carbon emissions: (1) improve efficiency at coal-fired power plants; (2) replace coal with lower-carbon natural gas; (3) expand renewable energy capacity; and (4) invest in energy efficiency.

Even at first glance, one of these things is not like the others. The first three relate directly to energy production—generating the same amount, or more, energy with lower emissions. Energy efficiency, however, means reducing demand.

Opponents of the rule seized on this difference, claiming it allowed the EPA to regulate activities “beyond the fence line” of power plants, which they believe exceeds the agency’s legal authority. In comments on the draft, industry groups likened the inclusion of energy efficiency to requiring automakers to pay their customers to drive less, or asking paper companies to pay people to write smaller. In short, utilities argued that the EPA has no authority to incentivize energy conservation.

This is a controversial argument. Environmental advocates, and presumably many within the EPA itself, felt that courts would reject this narrow view of agency’s role in energy and pollution. The EPA, however, decided it was a battle not worth fighting, and that’s the most likely reason it dropped energy efficiency from its emissions target calculations.

The EPA took steps to try to make up for energy efficiency’s removal. Analysts say the cost of solar panels is already on a steep decline and could drop as much as 40 percent in the next two years. The price of wind energy is down 58 percent over the past five years, and that trend is also likely to continue. Equipped with these bullish forecasts, the agency increased its projections for states’ capacity to expand renewable energy, which it hopes will offset the loss of energy efficiency in the emissions target calculations.

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