What is Energy Efficiency?

by Andy Goldman on April 29, 2013

What is Energy efficiency? This is the question we hear nowadays linked with the current financial and economic crisis. Energy efficiency is not energy saving per se but it concerns us all. It is something which is considered when we build a house, a building, a machine or any other system. In general and simple terms Energy efficiency is the ratio of the energy output and the energy input.

What is energy efficiency?

If we take a look at Wikipedia or any other encyclopaedia we will see that the energy term, Energy Efficiency, is referred to an energy conversion system or machine and it is the ratio between the output and the input in energy terms. It is off course noted that when we refer to the output we refer to useful output and this is electrical or mechanical power or heat. We all understand that the ratio cannot exceed unity or 100% as there are losses in all kinds of systems and in real world terms anything which approaches 100% is considered to be quite efficient. There are off course theoretical limits involved with every energy machine or system and thus the closer we can design a system to its theoretical limits the more efficient this system is.

Energy Efficiency theoretical limits

When we discuss electrical systems, energy efficiency is the power output for every electrical power consumed and for Thermal efficiency the ratio is useful heat per input energy.

Solar Cells can achieve several efficiencies depending on the technology used. As analysed in our article Solar energy efficiency, the efficiencies for the solar panels range from 6 to 40% with the theoretical limit of 85-90% depending on the technologies used.

Wind turbines can achieve a maximum 59% efficiency which is their theoretical limit.

Energy Efficiency in simple terms

In order to understand energy efficiency we should probably explain it in simple terms. Energy efficiency is basically, looking it from the output perspective, doing the same work or providing the same service with less energy.

What you should always remember is that Energy efficiency is not energy conservation because energy conservation is reducing the service or going without service in order to save energy. Basically energy conservation refers to absolute terms of energy and it is not a ratio.

In order to understand and be able to differentiate the two terms better, we provide an example from our daily life. When you switch off the lights or turn off the air-condition you conserve energy by an X amount since the lights are off, that is we have no service but we save energy. When we change the incandescent lamps we have in our house with efficient energy saving light bulbs we have energy efficiency because we get the same light output with less electrical power as an input.

what is energy efficiency

Energy Efficiency Standards

There are different organizations, government and other, which are dealing with energy efficiency standards, codes, labelling and monitoring this vast area of Energy efficiency. We have many University Labs and departments, such as the Berkeley Labs, which have been involved with Energy efficiency since the early 1970s and have produced many papers and standards which have been adopted by the industry.

There are energy efficiency standards which are set by the Energy Star program, which deals with products and homes.  The Leadership in Energy and Environmental Design, LEED, program is a voluntary independent program which leads to the certification of Green buildings. Green buildings are energy efficient buildings and thus the whole effort contributes to the reduction of CO2 emissions.

Energy Efficiency reduces CO2 emissions

When we adopt energy efficiency measures, take actions and use energy efficient machines and systems we indirectly reduce the CO2 emissions. This is accomplished in various ways. When we save electricity by using energy saving bulbs or efficient boilers for heating, we save energy which is produced through the use of fossil fuels which release Green House Gases, GHG.

It  should be noted that in order to enable energy efficiency there is a need for an initial capital investment, which will result to lower Operating Expenses and thus in the long term have a net positive effect on the cash flow of any company. At the same time we will be contributing to the slowdown of the climate change.

Energy Efficiency Tax Credit

There are federal tax credit programs which promote Energy Efficiency. These programs provide tax credit for energy intensive home and commercial appliances and systems. The residential energy efficiency tax credit program offers incentives from energy savings which result from water heaters, air conditioners, boilers, windows and roofs. The tax credit applies to home improvements made, such as replacement of old systems or the additional insulation of roofs and windows.

There are energy efficiency tax credit programs which promote the use of renewable green energy sources, RES, such as the use of Biomass for the heating of houses, or solar panel installation for the production of electricity for electricity use, or solar thermal panels for the heating of water.

Energy Efficiency Resource Standards, EERS

Energy Efficiency Resource Standards, EERS, aim in the setting of long-term targets and goals for energy savings. The standards apply to utilities which deal with energy such as electricity and natural gas utilities and the standards require from these utilities to achieve reduction on their energy sales as a result of energy saving measures that they apply. They basically treat Energy Efficiency as a resource.

Energy efficiency is large and important Energy area which touches many other related sub areas and certainly contributes to only the reduction of operating costs of a household or a company but helps in the reduction of Green House Gas, GHG, emissions.

About the Author

Andy Goldman

Andy Goldman is a 27-year veteran in the service industry with managerial, strategic, operational and consulting experience. Has managed teams of 5-45 people and has also managed several multidiscipline projects. He has worked in Europe and the USA and holds a BSc and MSc in Electrical Engineering and an MBA with a minor in Finance. For the past 5 years he has been an enthusiast of renewable technologies. Article by Andy Goldman You can connect with Andy Goldman at Google+

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