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Closing the Efficiency Gap

Rocky Mountain Institute's philosophy and approach to finding energy solutions is founded on optimizing whole-systems. By partnering with electric utilities and influential corporations and then analyzing an entire system and all of its interconnections simultaneously, we can identify strategies that increase business value and provide energy services more efficiently. This method often leads to drastic increases in efficiency and “big-picture solutions.”

Our goal is to find innovative and profitable solutions to rising energy costs, increased emissions regulation and climate change, and to help transform our antiquated electricity grid into an intelligent and responsive system with renewable and distributed energy sources, clean storage and real-time communication channels.

A Compelling Need for Transformation

Today we are more dependent on energy than ever, relying heavily on electricity for everything we do from cooling to computing to entertainment. But our current systems are inefficient, wasting both capital and electricity.

Nearly two-thirds of the energy used to produce electricity is lost as waste heat. And as populations grow and demand increases, we will combust more and more coal and natural gas to create electricity.

Electricity prices are expected to increase due to increasing demand and rising fossil fuel prices, creating a drag on our economy. And although we expect the nation's electric grid to be reliable, secure, and able to meet our increasing demands, it presents an easily accessible, high-impact target. Such disruption could darken cities and regions while creating significant collateral damage.

Perhaps most importantly, the U.S. lacks an integrated plan to fully leverage the combined efforts of research, technology developers, business, and government agencies.

The report, "Assessing the Electric Productivity Gap and the U.S. Efficiency Opportunity," analyzes the size of the electric productivity gap in the U.S and shows that the electric productivity among U.S. states varies dramatically. Electric productivity measures how much gross domestic product is generated for each kilowatt-hour consumed. In total, up to 30 percent of current electrical consumption could be curtailed nationwide by closing the electric productivity gap.

The Best Near-Term Opportunity

This finding is extremely significant because if laggard states achieved the electric productivity of the top ten performing states through energy efficiency, more than 60 percent of coal-fired generation could be displaced in the country.

The electric productivity of top performing states, such as New York, Connecticut, and California can serve as examples of how to overcome barriers to efficiency practices, regulate utilities, and implement technologies.  Lower performing states, like Kentucky and Mississippi, have a huge opportunity to build on the success of higher performing states by closing their electric productivity gap using known and tested technology and policy.

The next step will be to assess how to cost-effectively close the electric productivity gap. The analysis will focus on the impact that efficiency measures can have on existing building stock in the residential, commercial and industrial sector, and if a combination of these measures will cost-effective close the electric productivity gap in each state.