The Secret Ingredient for Cutting Costs and CO2 Emissions in Infrastructure
It’s saying a lot in today’s divided political climate that everyone seems to agree on the need to update U.S. infrastructure. There might be unanimous agreement in Congress.
Of course, there remain differences on how to do it - particularly about how to manage costs and how to pay for it. Which is why lawmakers should be looking a lot more closely at energy efficiency as they seek a path toward bipartisan infrastructure legislation. Some projects might even end up paying for themselves with the long-term energy savings.
What does efficiency have to do with infrastructure? A lot.
In the simplest of examples, consider the millions of lights that line our roads and bridges. According to the Department of Energy, upgrading outdoor lights in the U.S. with LED lighting would save $6 billion annually. It would also reduce carbon emissions by 40 million metric tons – roughly the amount generated by five million homes in a year.
And lighting is the tip of the iceberg. Water treatment and distribution facilities – a prime target for any infrastructure proposal – use vast amounts of energy. Water utilities are typically the largest energy consumers in cities and counties, often accounting for a third or more of a municipality’s total energy consumption. Cutting their energy use by a modest 10 percent could save $400 million a year.
Infrastructure also includes buildings. Think of airports, seaports, military installations, transit hubs and other critical facilities. Right now buildings account for about 40 percent of U.S. energy consumption. The federal government alone spends $6 billion annually on energy for its buildings.
Retrofitting or replacing energy-wasting buildings could easily reduce energy demand by a third. That’s another $2 billion a year in the savings kitty. Expand that to state and local facilities and the number increases exponentially.
Additional opportunities for improving efficiency abound across traditional infrastructure, including in modernizing transportation systems and upgrading the utility grid. In all of them, we’re talking about infrastructure that will be in operation for decades, so smart, integrated energy saving strategies help balloon savings to tens of billions of dollars over time.
In many cases, lifecycle energy cost savings can pay for a project altogether, and federal, state and local governments can leverage private capital to do the work. Under performance contracting, for example, private companies finance and perform efficiency upgrades to public facilities, with no upfront costs to the government.
The contractor is repaid over time through guaranteed energy savings, earning a profit along the way. If the resulting energy savings don’t cover the costs, the contractor is on the hook, not the taxpayer. To date, such contracts have saved the government – and therefore taxpayers – more than $12 billion in energy costs.
And then there’s the jobs implication. People are often surprised to learn that energy efficiency supports more than 2.25 million American jobs – far more than renewable energy industries such as wind and solar, and among the most in the entire energy sector. Seven in ten of those efficiency jobs are in construction and manufacturing.
A shot of federal investment in efficiency would drive that employment higher. Think of all the new windows, insulation, air conditioners and furnaces that would need to be manufactured and installed, along with loads of new, innovative technologies in energy management.
Add in dramatic reductions in carbon emissions, more manageable demand on the electric grid, and improved energy security, and the efficiency investment looks even smarter.
So how can we make all this happen? I’m not here to suggest it’s simple. It will require capital investment – some public and some private. It will require policies such as updating building codes and efficiency standards for appliances and equipment. And we will need to take a longer-term view of the true costs of our public infrastructure and facilities.
But if we’re serious about building the infrastructure of the future, it’s well worth it. A bipartisan infrastructure package presents a unique opportunity to get it right from the beginning and reap decades of benefits.
Jason Hartke is president of the Alliance to Save Energy, an energy efficiency advocacy organization based in Washington.