Efficiency

U.S. average energy use per person and per dollar of GDP declines through 2035

Growth in energy use is linked to population growth through increases in housing, commercial floorspace, transportation, and goods and services. These changes affect not only the level of energy use, but also the mix of fuels used. Energy consumption per capita declined from 337 million Btu in 2007 to 308 million Btu in 2009, the lowest level since 1967. In the AEO2011 Reference case, energy use per capita increases slightly through 2013, as the economy recovers from the 2008-2009 economic downturn. After 2013, energy use per capita declines by 0.3 percent per year on average, to 293 million Btu in 2035, as higher efficiency standards for vehicles and appliances take effect (Figure 55).

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Energy intensity (Btu of energy use per dollar of real GDP) falls as a result of structural changes and efficiency improvements. Since 1990, a growing share of U.S. output has come from less energy-intensive services. In 1990, 68 percent of the total value of output came from services, 8 percent from energy-intensive manufacturing industries, and the balance from non-energy-intensive manufacturing and the nonmanufacturing industries (e.g., agriculture, mining, and construction). In 2009, services accounted for 76 percent of total output and energy-intensive industries only 6 percent. Services continue to play a growing role in the AEO2011 Reference case, accounting for 79 percent of total output in 2035, with energy-intensive manufacturing accounting for less than 5 percent. In combination with improvements in energy efficiency in all sectors, the shift away from energy-intensive industries pushes overall energy intensity down by an average of 1.9 percent per year from 2009 to 2035.

Residential energy use per capita varies with end-use technology assumptions

In the AEO2011 Reference case, residential energy use per capita declines by 17.0 percent from 2009 to 2035 (Figure 58). Delivered energy use stays relatively constant while population grows by 26.7 percent during the period. Growth in the number of homes and in average square footage leads to increased demand for energy services, which is offset in part by efficiency gains in space heating, water heating, and lighting equipment. Population shifts to warmer and drier climates also reduce energy demand for space heating.

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Three alternative cases show the potential role of energy-efficient technologies in reducing energy use per capita. The 2010 Technology case assumes no improvement in efficiency for equipment or building shells beyond what is available in 2010. The High Technology case assumes earlier availability, lower cost, higher efficiency, and more energy-efficient consumer purchasing decisions for some advanced equipment. The Best Available Technology case limits purchases of new and replacement appliances to the most efficient available in the year of replacement—regardless of cost—and assumes that new home construction adopts the most energy-efficient components for insulation, windows, and space conditioning equipment.

In the High Technology and Best Available Technology cases, with greater efficiency improvements, household energy use per capita declines by 25.4 percent and 34.1 percent, respectively, from 2009 to 2035. Household energy use per capita falls by 9.6 percent from 2009 to 2035 in the 2010 Technology case, even in the absence of efficiency improvements in commercially available equipment and new building shells, as older equipment is retired and replaced with 2010 vintage equipment.

Electricity use increases despite improved efficiency of electric devices

Electricity use grows 0.7 percent per year, from 42 percent of total residential delivered energy consumption in 2009 to 47 percent in 2035 in the AEO2011 Reference case. Growing service demand is only partially offset by technological improvements that lead to increased efficiency of electric devices and appliances.

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Despite increases in market penetration by ENERGY STAR qualified computers, as well as a general shift from desktop computers to laptops and other portable computing devices, energy use for personal computers (PCs) and related equipment continues to grow slowly, as the number of computers and peripherals per household increases (although at a slower rate than in the past). Contributing to the growth are related electronic devices, such as high-speed internet modems and network routers, which typically lack automatic standby modes and consume full power 24 hours a day.

Increased market penetration is also expected for ENERGY STAR televisions and computer monitors. Flat panel displays capture a growing share of the market and overall stock efficiency improves as light-emitting diodes (LEDs) displace cold cathode fluorescent lamps as a major backlighting technology for liquid crystal displays. Improvements in efficiency are offset to some degree, however, by a trend toward larger screen sizes.

The EISA2007 Federal lighting standards will lead to a decline in energy use for lighting, as low-efficacy incandescent lamps are replaced by compact fluorescent, LED, and high-efficiency incandescent lamps (Figure 59). In 2020, delivered energy use for lighting per household in the Reference case is 33 percent below the 2009 level.

AEO reflects improvement in efficiency standards

Since their inception in the 1970s, Federal efficiency standards have expanded to cover an extensive range of residential equipment [86]. The Reference case captures the continuing effects of the standards, which often are the primary reason for efficiency gains.

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The largest gains in efficiency are expected for lighting, based on EISA2007 standards that require the phased replacement of most incandescent lamps with technologies that by 2020 are roughly three times more efficient than those widely marketed today (Figure 60). Refrigerators and water heaters also have been the subject of recent U.S. Department of Energy rulemakings. Overall, delivered energy use for products covered by the new standards declines by 0.1 percent per year, even as the number of households increase by an average of 1 percent per year.

The Best Available Technology case—which does not consider cost—demonstrates even greater gains in energy efficiency, especially for electric equipment, which has greater potential for improvement. In that case, delivered energy consumption per household declines by 1.7 percent per year from 2009 to 2035, and the total in 2035 is 1.8 quadrillion Btu lower than the 2009 level.

A variety of other products—mostly consumer electronics—are not subject to existing standards, although voluntary programs, such as ENERGY STAR, still lead to some efficiency gains in the AEO2011 Reference case. Delivered energy use for such products grows faster than the number of households, averaging 1.5 percent per year in the Reference case.

End-use efficiency improvements could lower energy consumption per capita

The AEO2011 Reference case shows minimal change in commercial energy use per capita between 2009 and 2035 (Figure 62). While growth in commercial floorspace (1.2 percent per year) is faster than growth in population (0.9 percent per year), energy use per capita remains relatively steady due to efficiency improvements in equipment and building shells. Efficiency standards and the addition of more efficient technologies account for a large share of the improvement in the efficiency of end-use services, notably in space cooling, refrigeration, and lighting.

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Three alternative cases use different assumptions about technology and energy efficiency to examine uncertainty in the projections of commercial energy consumption per capita. The 2010 Technology case limits equipment and building shell technologies to the options available in 2010. The High Technology case assumes lower costs, higher efficiencies for equipment and building shells, and earlier availability of some advanced equipment than in the Reference case, with commercial consumers placing greater importance on the value of future energy savings. The Best Available Technology case limits future equipment choices to the most efficient model for each technology available in the year of replacement and assumes more improvement in the efficiency of building shells for new and existing buildings than in the High Technology case.

Commercial energy consumption per capita in 2035 is 3.9 percent higher in the 2010 Technology case than in the Reference case. In contrast, it is 12.5 percent lower in the High Technology case and 17.9 percent lower in the Best Available Technology case than in the Reference case.

Core technologies lead efficiency gains in the commercial sector

Delivered energy consumption for core space heating, ventilation, air conditioning, water heating, lighting, cooking, and refrigeration uses grows at an average annual rate of 0.6 percent in the AEO2011 Reference case, compared with 1.2 percent annual growth in commercial floorspace. These core end uses, which frequently have been targets of energy efficiency standards, accounted for just over 60 percent of commercial delivered energy demand in 2009 and are projected to fall to 55 percent of delivered energy in 2035. Energy consumption for the remaining end uses together grows by 1.5 percent per year, led by other electric end uses and by office equipment other than computers.

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The percentage gains in efficiency in the Reference case are highest for refrigeration, as a result of provisions in Energy Policy Act of 2005 (EPACT2005) and EISA2007. Electric space heating shows the next-largest percentage improvement, followed by lighting and cooling (Figure 64).

The Best Available Technology case demonstrates the significant potential for further improvement—especially in electric equipment, led by lighting, space heating, and water heating. In the Best Available Technology case, the share of total commercial delivered energy use accounted for by the core end uses falls to 49 percent in 2035, with significant efficiency gains coming from LED lighting, GSHPs, high-efficiency rooftop heat pumps, centrifugal chillers, and solar water heaters. Those technologies are relatively costly, however, and thus are unlikely to gain wide adoption in commercial applications without improved economics or additional incentives. Additional efficiency improvements could also come from an expansion of standards to include some of the rapidly growing miscellaneous electric applications.

CAFE and greenhouse gas emissions standards boost vehicle fuel economy

After the introduction of corporate average fuel economy (CAFE) standards in 1978, the fuel economy for all LDVs increased from 19.9 miles per gallon (mpg) in 1978 to 26.2 in 1987. Despite continued technological improvement, fuel economy fell to between 24 and 26 mpg over the next two decades, with sales of light trucks increasing from about 20 percent of new LDV sales in 1980 to 55 percent in 2004 [88]. From 2004 to 2008, fuel prices increased, sales of light trucks slowed, and tighter fuel economy standards for light-duty trucks were introduced. As a result, average fuel economy for LDVs rose to 28.0 mpg in 2008.

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The National Highway Traffic Safety Administration (NHTSA) introduced new attribute-based CAFE standards for MY 2011 LDVs in 2009, and in 2010 NHTSA and The U.S. Environmental Protection Agency (EPA) jointly announced CAFE and GHG emissions standards for MY 2012 to MY 2016. EISA2007 also requires that LDVs reach an average fuel economy of 35 mpg by MY 2020 [89]. In the Reference case, the average fuel economy of new LDVs (including credits for alternative fueled vehicles and banked credits) rises to 29.8 mpg in 2011, 33.3 mpg in 2016, and 35.8 mpg in 2020 (Figure 72). After 2020, CAFE standards for LDVs remain constant in the Reference case, and LDV fuel economy increases only moderately, to 37.8 mpg in 2035.

In the Reference case, cars represent 65 percent of LDV sales in 2035, compared with 69 percent in the High Oil Price case and 55 percent in the Low Oil Price case. The economics of fuel-saving technologies improve in the High Technology and High Oil Price cases, but the effects on average fuel economy relative to the Reference case are tempered by the fact that CAFE standards already require significant improvement in fuel economy performance and the penetration of advanced technologies.

New technologies promise better vehicle fuel efficiency

The market adoption of advanced technologies in conventional vehicles facilitates the improvement in fuel economy that is necessary to meet more stringent CAFE standards through MY 2020 and reduce fuel costs thereafter. In the AEO2011 Reference case, the CAFE compliance of new LDVs rises from 29.1 mpg in 2009 to 35.8 mpg in 2020 and 37.8 mpg in 2035, due in part to greater penetration of unconventionally fueled vehicles and in part to the addition of individual technologies in conventional vehicles (Figure 74).

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In 2035, advanced drag reduction, which provides fuel economy improvements by reducing vehicle air resistance at higher speeds, is implemented in 98 percent of new LDVs. In addition, with the adoption of light-weight materials through material substitution, the average weights of new cars and light trucks decline by 4.9 percent and 1.5 percent, respectively, from 2009 to 2035, providing additional improvements in fuel economy.

Advanced transmission technologies also improve fuel economy by improving the efficiency of vehicle drive trains. Aggressive shift logic is used in 73 percent of new LDVs in 2035; and other advanced technologies, such as continuously variable, automated manual, and six-speed transmissions, are installed in 56 percent of new conventional vehicles.

Engine technologies that reduce fuel consumption also penetrate the market for new vehicles. Cylinder deactivation and turbocharging reach penetrations of 31 and 14 percent, respectively, in 2035. Electrification of accessories such as pumps and power steering, which also increases fuel economy, is implemented in 19 percent of new LDVs in 2035.