President Obama, who has been promoting the weatherization of homes and businesses as both an energy-saving and money-saving practice, was recently quoted saying, “If you saw $20 bills just sort of floating through the window up into the atmosphere, you’d try to figure out how you were going to keep them.” It is hard to disagree.
But what if you were driving or walking near electricity infrastructure and you noticed that $20 bills were oozing out of the wires and floating onto the road? I imagine that you’d try to stop and pick those up too.
If site-based efficiency gains (caulking your home or installing higher efficiency appliances) are like collecting $20 bills for yourself, then source-based efficiency gains are like society finding $20 bills laying all over the place.
After accounting for extraction, generation, transmission, and distribution (or, after adopting a source-based efficiency measure), three times more energy reaches the customer with the direct use of natural gas as compared to electricity. Put another way, if you start with 100 units of source energy, 32 of them will reach the customer if they are converted to electricity first, but 92 of them will reach the customer if they are used directly in natural gas furnaces, water heaters, etc. (for more information see AGA’s new direct-use slides here). It is a story you have likely heard before, but it bears repeating.
This is not to say that people should allow $20 bills to float through their windows. But we should all be thinking more about the $20 bills lying on the road.