McKinsey Energy-Efficiency Savings Estimates $530-630 BILLION

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The new McKinsey report is getting a lot of traction in the media right now—and I’ve see different versions of savings and costs cited (see the NY Times, Forbes, and the WSJ blog, for example) .  Here’s what I read:

  • $1.2 trillion in savings (net present value)
  • $520 billion in upfront investment (NPV)
  • $50-150 billion in program costs (NPV)
  • Net savings (also NPV), therefore, of $530 billion to $630 billion

That’s a deal!

And this would deliver  the U.S. 23% energy savings by 2020.   And the price to achieve this savings, sliced another way, is 68 percent below the forecasted price of energy in 2020.  Or as the report states, “Put another way, even the most expensive opportunities selected in this study are attractive over the lifetime of the measure and represent the least expensive way to provide for future energy requirements [emphasis added].”

In any event, I’m glad people are reading this and paying attention to it.  The main conclusion I cited yesterday sums it in energy-wonk-speak.   And more to the point, why not increase energy security, decrease energy independence, and since the energy-efficiency gains are largely derived from investments at the local level, boost the economy?

Thanks,
Mike

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2 Responses to “McKinsey Energy-Efficiency Savings Estimates $530-630 BILLION”

  1. Speaking of natural gas, the fracking debate heats up. Where is efficiency is the conversation? « GreenHomes America Says:

    [...] energy policy and our energy practices pay way too little attention to energy efficiency.  The McKinsey report indicated that investing in efficiency could SAVE the country half a trillion dollars.  Amory [...]

  2. Hope for sound energy policy? Can left and right take the smart path? « GreenHomes America Says:

    [...] cry is for both tax cuts and erasing the budget deficit—a nontrivial challenge.  Of course, the McKinsey report showed that this was smart especially when driven by energy-efficiency [...]

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