{"id":1663,"date":"2015-03-07T21:00:08","date_gmt":"2015-03-08T03:00:08","guid":{"rendered":"https:\/\/allenergyconsulting.com\/blog\/?p=1663"},"modified":"2015-03-09T07:32:11","modified_gmt":"2015-03-09T12:32:11","slug":"most-efficient-state-apples-and-oranges","status":"publish","type":"post","link":"https:\/\/allenergyconsulting.com\/blog\/2015\/03\/07\/most-efficient-state-apples-and-oranges\/","title":{"rendered":"Most Energy Efficient State – Apples and Oranges"},"content":{"rendered":"

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The American Council for an Energy-Efficient Economy (ACEEE) produces a list of the most energy efficient state each year \u2013 link to the report<\/a>.\u00a0 This report was blasted across the news \u2013 Forbes, US News, Bloomberg etc\u2026\u00a0\u00a0 There was no doubt made by the reporters that the report was empirical and 100% accurate.\u00a0 However, energy efficiency is not an absolute number and requires some thought to produce given the uses of energy and the environment. There are many issues with energy efficiency rankings and how one deciphers the ranking.\u00a0 We will show you a perspective that makes one of the highest ranked energy efficient state in ACEEE rankings to be not that energy efficient after all.<\/p>\n

The simple definition for energy efficiency is using less energy to provide the same service.\u00a0 In the end, energy efficiency like energy is only a means to an end, not the end in itself.\u00a0 Without a thorough understanding of that fact, this can lead to misleading conclusions.\u00a0 There are many opportunities in energy efficiency analysis that can lead to apples and oranges comparisons causing poor policy choices.<\/p>\n

If one state is mild in weather and yet produces widgets with less energy \u2013 this does not mean they are more energy efficient via their programs or technology, but perhaps they are more efficient because of location.\u00a0\u00a0 Therefore, to deduce that programs and technology from one state should apply to another state without weather normalization is misleading.\u00a0 For those not aware of this fact<\/strong> \u2013 the majority use of energy when it comes to weather in the US is for heating.\u00a0\u00a0 There are more Heating Degree Days than Cooling Degree Days \u2013 see figure below.\u00a0\u00a0 Trying to compare states without being aware and accounting for weather difference can lead to poor policy choices. (Will global warming reduce energy consumption for climate control in the US? See figure below)<\/p>\n

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Energy efficiency has also been expressed as energy intensity \u2013 a measurement with economic parameter typically Gross Domestic Product or Gross Domestic Product per capita.\u00a0 Therefore, the outcome expresses the use of energy and the conversion to the economic parameters \u2013 Energy\/Dollar.\u00a0 The figure below displays Retail Sales MWH \/ GDP on a state by state basis.\u00a0 California and the East Coast states look superior to others.<\/p>\n

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If state A economy depends on industrial manufacturing to make the widgets used by state B whose economy involved services such as finance to telecom, the energy intensity calculation would infer that state B is superior to state A.\u00a0\u00a0 However, this is not the case in reality.\u00a0 Using more energy to generate the equivalent GDP does not mean state A is inefficient.\u00a0 State A should not be made to confirm to state B energy standards for the sole purpose of energy efficiency.\u00a0\u00a0 An energy efficiency comparison can be made to state C whose economy is very similar and makes the same amount of widgets.\u00a0 States with different economies cannot be compared in terms of energy efficiency.\u00a0\u00a0 One could argue the merits of the economy choice (production vs. service economy), but one cannot take the energy efficiency as being comparable given the end product is completely different.<\/p>\n

The amount of people in a state is also a key point to address.\u00a0\u00a0 The shear population density changes the use of energy.\u00a0\u00a0 Those living in close quarters will generally use less energy as the housing is likely smaller and the ambient energy use from your neighbor can reduce your energy use.\u00a0 To take a more dense population region and try to extrapolate the energy efficiency programs and goals to a region not as dense is comparing apples to oranges.\u00a0 By doing, so you are requiring a change beyond energy use if you plan to produce similar results.\u00a0 The figure below presents the Retail Sales Per Capita by state.\u00a0 Once again California and the East Coast states look superior to others.\u00a0 However, we know they have a much higher population density per square foot than the rest of the country.<\/p>\n

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What people are doing in each state is also important in analyzing energy usage as it relates to the economy.\u00a0\u00a0 If you have a region where significant portion of the population are not employed (a result of unemployed adult and more children in one state than another) their energy usage will be much less than those whose population is working.\u00a0 The employed force potentially creates a more balanced metric of economic parameter than GDP and population given the credit for job creation.\u00a0 In addition, those people are the ones paying for energy whether at home or in the workplace.\u00a0\u00a0 The figure below shows the percentage of employed workforce by state.\u00a0\u00a0 The surprise is California.\u00a0\u00a0 California no doubt will be more youthful, but the temperate weather probably leads to heighten level of a casual beach life.\u00a0 There is not much energy usage sleeping on or near the beach.\u00a0 Policy makers would not want to produce policy that lead to great efficiency only to lose jobs.<\/p>\n

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If we view the metric that normalizes weather by dividing energy use by degree day plus incorporate the amount of people employed we can produce a metric less on locational luck and more focused on energy usage and underlying economy \u2013 jobs.\u00a0 The figure below does just that.<\/p>\n

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The ACEE report perspective is similar with this perspective for the NE states.\u00a0 Those states, as noted in ACEEE, use their energy well given the weather conditions.\u00a0 However, the number 2 state in their ranking, California, seems to be very lucky given their sunny and temperate disposition based on this perspective.\u00a0\u00a0 Ohio, in this measure, actually ranks better than California.\u00a0 This perspective still does not account for the less density living found in Ohio relative to California, so in that light, Ohio is doing quite well.<\/p>\n

Many in the state of Ohio are enamored about all the great efficiency reports being claimed from California.\u00a0 They are desperate to follow California down their path \u2013 we just hope they separate the apples and oranges.\u00a0 To even approach some of the metrics presented from California, Ohio will need to change its culture and temperature \u2013 both improbable task.\u00a0\u00a0 All Energy Consulting is not advocating this is the one<\/em><\/strong> correct view \u2013 we are being observant and open-minded when it comes to variables such as energy efficiency. \u00a0There are many lenses to look through to fully appreciate the various energy issues.<\/p>\n

If you enjoy this type of analysis, please do consider supporting All Energy Consulting by contacting us for your energy consulting needs.\u00a0\u00a0 We are able to offer these types of analysis because of the support we get from our clients.\u00a0 All Energy Consulting offers a pragmatic but enlightening approach to analyzing the energy markets.\u00a0\u00a0 Our focus will always be for your success.<\/p>\n

Your Looking Through Multiple Lenses Energy Analyst,<\/p>\n

David<\/p>\n

David K. Bellman
\nFounder\/Principal
\nAll Energy Consulting LLC- “Adding insights to the energy markets for your success.\u201d
\n614-356-0484
\ndkb@allenergyconsulting.com
\n<\/a>@AECDKB<\/p>\n

Sign Up to AEC Free Energy Market Insights Newsletter<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The American Council for an Energy-Efficient Economy (ACEEE) produces a list of the most energy efficient state each year \u2013 link to the report.\u00a0 This report was blasted across the news \u2013 Forbes, US News, Bloomberg etc\u2026\u00a0\u00a0 There was no doubt made by the reporters that the report was empirical and 100% accurate.\u00a0 However, energy […]<\/p>\n","protected":false},"author":1,"featured_media":1668,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1,6],"tags":[42,46,45,367],"class_list":["post-1663","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-market-insights","category-power","tag-efficiency","tag-efficiency-programs","tag-energy-efficiency","tag-most-efficient-state"],"_links":{"self":[{"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/posts\/1663","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/comments?post=1663"}],"version-history":[{"count":10,"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/posts\/1663\/revisions"}],"predecessor-version":[{"id":1682,"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/posts\/1663\/revisions\/1682"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/media\/1668"}],"wp:attachment":[{"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/media?parent=1663"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/categories?post=1663"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/tags?post=1663"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}