# Mind the Electric Gap

Thirty percent of U.S. electricity consumption could be erased through gains in energy productivity, according to the Rocky Mountain Institute. (Related: see R.M.I. chairman Amory Lovins‘s recent guest post.) The institute’s analysis arrived at electricity productivity stats for all 50 states by dividing each state’s G.D.P. by the kilowatt hours of electricity it consumed.

New York state topped its list. For each kilowatt hour of electricity (the equivalent of burning one 100-watt light bulb for 10 hours) the Empire State consumes, it generates \$7.18 in G.D.P. Mississippi, squarely on the bottom of the electric productivity list, generates just over \$3 per kilowatt hour. The R.M.I. claims significant cutbacks in carbon emissions could be made (pdf) if all 50 states could increase their productivity to match the top 10 most productive states (in descending order: New York, Alaska, Connecticut, Delaware, California, New Jersey, Massachusetts, Rhode Island, New Hampshire, and Colorado). They call it “closing the efficiency gap.”

See for yourself. To visualize its data, R.M.I. has launched a cool interactive map, where you can see how your state stacks up in energy productivity, and the potential carbon savings it could make through productivity enhancements alone.

The institute is currently at work on a follow-up paper that will offer some solutions for closing that gap. What kinds of strategies should they use?

1. Ben D says:

“kilowatt hour of electricity (the equivalent of burning one 100-watt light bulb for one hour)”

That would equal 0.1 kilowatt hours. You are off by a factor of 10.

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2. MBirchmeier says:

Is there a real or even supposed link between energy efficiency and GDP? I would imagine that New York’s GDP is higher due to the presence of a strong financial industry, and this is independent of any electric efficiency that may exist between New York and Mississippi.

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3. Alex says:

This study assumes all kinds of weird relationships between energy and GDP that just don’t seem to be accurate. You know why New York is so high on that list? Because banking takes a lot less energy than farming does to produce money. You know why Mississippi and Kentucky are at the bottom? Because farming and coal mining are energy intensive and produce inexpensive products.

So what’s the answer then? Stop farming and make every state convert to a white collar economy? Doesn’t seem feasible to me.

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4. the Gooch says:

New York being #1 in GDP/kWh just shows what you can do by fabricating earnings on Wall Street. They will not be #1 on that list for long.

Also, do they count the revenues of the utility companies in the state as part of the state’s GDP? If so, you could easily catapult your state to the top by jacking up utility rates…but increased energy prices aren’t the (overt) goal of the energy conservation movement.

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5. Terry says:

This looks similiar to a service-economy state vs manufacturing-economy state map. If we eliminated our manufacturing sector, sure we would be more efficient, but also less diverse.

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6. Energy Guy says:

There’s certainly many opportunities for efficiency improvements, but their measure of efficiency is too crude to be useful.

How many hot climate states do you see on the list of the most efficient? Maybe we should see if we can drag all the states in cooling-dominated climates up to colder locales so that they wouldn’t need so much air conditioning?

You will also find higher “efficiency” as they define it in states with greater access to natural gas and in states with higher electricity prices. Electricity-intensive industry and all-electric homes are much more common in places with historically cheap power — like the hydroelectric dominated Northwest and coal dominated states like Kentucky.

A simple regression model with a few factors such as climate (especially cooling degree days), the saturation of electrically heated homes, and electricity prices will explain the vast majority of the inter-state differences and lead to a very different ordering. Many of the apparently high efficiency states will be shown to have higher natural gas usage too.

The main conclusion may be that high electric prices will lead to lower electric usage (not a surprise) , but with relativley low short-term elasticity but high long-term elasticity. Thus raising prices will work, but there will be some short-term pain and lots of people/businesses who lose out due to fuel choices and locations selected based on low power prices.

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7. Devin says:

What would be more interesting to see is if rural NY is just as productive per kilowatt as NYC. Manhattan is still a financial core of for the world, and the city is very dense with people, buildings and business. It’s easier to acheive electri-nomics of scale in that situation. As for Alaska, most of their population is near Anchorage, and they have a greater incentive to be efficient given their climate. Of course that cant explain everything related to the study, but just a thought.

So basically the bottom states need to move to higher latitudes and become dense centers for capital flows.

Or just price electricity to reflect it’s true cost to consumers. Simple!

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8. Hunter says:

Grrr. Look at the list of the most efficient by kWh. 7 of the 10 have little in the way of “real” wealth creation industries – by which I mean either farming/extraction or manufacturing. If you want to create real wealth that doesn’t involve repackaging money or ideas a dozen times, then I think a different metric is required.

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