Understanding energy efficiency

Energy efficiency is an appealing but potentially treacherous figure of merit that has been applied to entire economies as well as to tasks and processes within economies. The efficiency concept has been resorted to in debates about the best way for the US to utilize its coal resources. Coal could be used to heat the home, for example, either by converting it to substitute natural gas (SNG) for pipeline transmission to residential furnaces, or by burning it in coal-fired generatig plants to produce electricity for electrical home heating. It is instructive to compare the Btu efficiencies of these alternate paths to the consumer. But such comparisons can mislead when taken as the basis for policy decisions, since: (1) the comparisons are subject to large essential uncertainties; (2) it is easy to overlook inconsistencies and incommensurables on the two sides of a comparison; and (3) the comparisons neglect the operation of the marketplace and the unequal value that consumers have traditionally placed on different energy forms irrespective of efficiency considerations. When employed to identify trouble spots and areas of possible improvement in the use of energy, efficiency comparisons can be very helpful. But they are not the rationale for consumer purchases;more » they are only one of a multitude of considerations that must be weighed in choosing among technologies; and they do not by themselves provide either accurate or adequate guidance for policy decisions. 17 references.« less