Energy Economics

Kelly Kissock, Ph.D., P.E.Department of Mechanical and Aerospace EngineeringUniversity of Dayton Industrial Assessment Center

“Efficiency Gap”

• “Numerous studies conclude 20% to 40% energy savings could be implemented cost effectively, but aren’t…..”

• Discrepancy between economic and actual savings potential called “efficiency gap”.

Cost of Energy Efficiency

• “ACEEE Research shows that some 25% of total electricity usage can be saved cost effectively, at an average of 3 cents or less per saved per kWh. New generation sources cost 5 cents or more per kWh, making efficiency the lowest cost electricity resource”

U.S. CO2 Emissions 6 GT/yr Can reduce 1.3 GT/yr at Negative Cost

Miller, P., 2000, “Saving Energy It Starts at Home”, National Geographic, March

Global CO2 Reduction Potential

“The Carbon Productivity Challenge”, McKinsey Global Institute, http://www.mckinsey.com