What does a negawatt really cost?
We use data from ten utility conservation programs to calculate the cost per kWh of electricity saved -- the cost of a "negawatthour" -- resulting from these programs. We first compute the life-cycle cost per kWh saved based on utility experience and expectations associated with these cons...
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| Format: | Working Paper |
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MIT Center for Energy and Environmental Policy Research
2009
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| Summary: | We use data from ten utility conservation programs to calculate the cost per kWh of electricity saved -- the cost of a "negawatthour" -- resulting from these programs. We first compute the life-cycle cost per kWh saved based on utility experience and expectations associated with these conservation programs. The resulting figures indicate that the cost of a negawatthour is substantially higher than previously suggested by standard sources such as Lovins and EPRI which are routinely cited by policymakers. The costs calculated for residential programs in particular are much higher than conservation advocates have suggested. We find substantial variation in costs for similar programs between utilities as well as significant intro-utility variation in the cost per kWh saved for specific sub-programs. Some of these programs appear to be uneconomical even before correcting for biases in utility cost accounting and in the measurement of actual electricity savings. |
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