Is the natural gas revolution good or bad for energy efficiency?

If there were an equivalent in the energy industry to Time Magazine’s Person of the Year, natural gas would be this year’s winner.

The dramatic rise in natural gas supply, and fall in price, has reconfigured the energy scene in the United States. It's suddenly created a bounty of domestic energy which has driven down wholesale power prices and accelerated retirement of polluting coal-fired plants.

Veteran energy insiders have told me in recent interviews that they never expected in their lifetime to see this kind of rapid market shift.

So what does the natural gas bonanza mean to energy efficiency – another resource creating surprising changes in the electric grid?

Typically, when energy gets cheap consumers stop thinking about efficiency. But the American Council for an Energy-Efficient Economy sees a different scenario emerging this time, according to two reports released by the Washington, DC-based organization in September.

First, it’s important to note that energy efficiency is not just something done in the household or office. It’s managed on a large scale by utilities and grid planners and often now competes head-to-head with power plants as a means to keep the lights on.So when an area of the country needs more power, it might build a new gas-fired power plant, install wind turbines or solar, or some other kind of power generator. Or it might inject more energy efficiency into the system by way of  energy saving technologies, programs or incentives.

Many factors go into deciding which will be selected, but price ranks high. And despite the fall in natural gas prices, energy efficiency remains the lowest cost resource on the electric grid – it’s still cheaper to save energy than to build new power plants, according to the ACEEE white paper Saving Money and Reducing Risk: How Energy Efficiency Enhances the Benefits of the Natural Gas Boom 

Photo of gas burner provided by CCat82 via Shutterstock

Next page: Natural gas and energy efficiency: fostering the competition