A Penny Saved is … Three Pennies Earned

Posted by Eveline Killian on Apr 9, 2014 6:00:00 AM

I came across Ben Franklin’s famous saying “A penny saved is a penny earned” and it got me thinking about energy saving. Just like a heat pump seems to make energy for free (which it doesn’t, but that’s another story), saving energy through energy efficiency is a cumulative principal that saves much more than the actual kW or gallon of fuel that you’re not using. Consider the generation, distribution and transmission costs of the energy itself. By the time the kW is available at your circuit breaker, you’ve already lost 65-70% of the energy potential of that lump of coal or gallon of crude oil.

The Cost of Supplying Energy

Usable vs. Lost Energy Usable vs. Lost Energy

The average efficiency of a fossil-fuel power plant is 35%. Upon electricity generation, it must be transmitted across the country and distributed – stepped down - from the high voltage transmission grid to voltages for residential, industrial and commercial buildings. Transmission and distribution losses average about 7%.

This means only 30% of the electricity produced from the mines in West Virginia or the shipment of tar sands oil or the crude oil extracted out of the wells in the Gulf makes it to its destination. In other words, we are throwing away two lumps of coal for every three lumps extracted out of the ground, or dumping two gallons of oil out for every three pumped gallons.

Equipment Inefficiency

Now add to this the inefficiency of our building’s equipment. If, for example, we have a 20 horsepower constant speed heating/ cooling water pump, this pump consumes approximately 15kW and is designed for peak heating and cooling loads. Using conservative estimates, a variable speed drive could reduce this consumption by 40% or 6kW for most of the year as a building is seldom under peak load conditions. If we assume we can save this energy for 5,000 hours per year, we’re saving approximately 30,000kWh annually on our bill. But, in reality, we are saving 82,300kWh worth of energy at the source!

Conversely, keeping this constant speed pump means we are burning eight out of eleven lumps of coal extracted out of the ground for nothing. Just picture this for a minute….it’s very sobering when we consider the global climate change issue we are facing.

near . Warm water from the plant is a favorite... (Photo credit: Wikipedia)

Efficiency Contributions are Exponential

Buildings (residential, commercial and industrial) represent 32% of total final energy consumption. Consider the significant impact each of us can have on the worldwide carbon footprint if we all do the little things that have three times the savings than we actually see on our bills! In addition, the improved air quality, the reduced threat of the cost of climate change, and the reduction in health care costs, are real costs that are not even included in this 3:1 ratio of energy generation. That’s a pretty compelling argument to invest in energy efficiency! In this case, Ben Franklin was wrong – a penny saved is three times as valuable as he assumed.

Topics: Energy Efficiency

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