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Report: ICT Saves Energy
Feb 2008
WASHINGTON, Feb. 6, 2008 -- Technology leads to a dramatic increase in energy efficiency and is actually a net saver of energy by a 10:1 ratio across the economy, according to the American Council for an Energy-Efficient Economy (ACEEE), which said it has found a direct correlation between gains in energy productivity and investments in information and communications technology (ICT).

The ACEEE said it takes less than half the energy to produce a dollar of economic output as it did in 1970 and that energy efficiency gains have increased significantly since 1996.

"Whether it is making our buildings smarter, reducing heating and cooling costs, harnessing the power of the sun, virtualization or enabling telecommunications, technology is a driving force in making our country more energy efficient," said Mike Splinter, president and CEO of Applied Materials Inc. and chair of the Technology CEO Council (TCC), a lobbying group. "Many of our nation's companies have demonstrated that through technology they can do more business with less energy. Now we must ensure that we maximize the energy efficiency and environmental benefits that technology brings to our economy and that those benefits are shared by all."

Founded in 1989 and formerly known as the Computer Systems Policy Project, TCC members also include Michael Dell, Dell chairman and CEO; Paul S. Otellini, president and CEO of Intel Corp., Mark V. Hurd, chairman, president and CEO of Hewlett-Packard Co.; Samuel J. Palmisano, chairman, president and CEO of IBM Corp.; Greg Brown, CEO of Motorola Inc.; Joseph McGrath, president and CEO of Unisys Corp.; and, William Nuti, president and CEO of NCR Corp.; Joe Tucci, EMC chairman; and Steve Appleton, Micron chairman and CEO.

The ACEEE report on its study, "Information and Communication Technologies: The Power of Productivity," was commissioned by the TCC.

Among key findings are that for every extra kWh of electricity that has been demanded by ICT technologies, the US economy increased its overall energy savings by a factor of about 10. Thus, these productivity gains have led to huge net savings in both energy and economic costs. "The extraordinary take away from this finding is that ICT is a net saver of energy across our economy," the ACEEE said.

Data for the past 37 years indicate that the pace of energy efficiency gains has increased significantly since 1996. Whereas US energy intensity declined 1.8 percent per year between 1970 and 1995, it declined at a much more rapid rate of 2.4 percent between 1996 and 2006.

Since 1970, the United States has dramatically improved the amount of energy it takes to generate economic activity, according to the report. Today, it takes less than half the energy to produce a dollar of economic output as it did in 1970. US energy consumption per dollar of economic output has declined from 18 thousand Btus in 1970 to less than 9 thousand Btus by the end of 2008. Through that energy efficiency, we have met approximately 75 percent of our new demand for energy. "This analysis clearly demonstrates the untold story behind energy efficiency -- that information technology enables tremendous energy savings in many applications throughout society," said Paul S. Otellini, President and CEO of Intel Corp. "What we see is a one-two punch: Our industry is improving the energy-efficiency of its own products, while those products drive even greater savings across the entire economy."

In tandem with the ACEEE report, the TCC released its own report, "The Smarter Shade of Green: How Innovative Technologies are Saving Energy, Time and Money," focusing on specific technology initiatives that are making our economy energy efficient.

Among the findings in the TCC study is that "virtualization" is leading to dramatic energy efficiency. Virtualization enables businesses to run multiple systems and operations on remote computers, reducing the energy demand. To date, 1.2 million servers have been virtualized, the TCC said, which is equal to saving 8.4 billion kilowatt hours of electricity a year, according to the Gartner Data Center Conference. This is more than the heating, ventilation and cooling electricity consumed in New England in a year, it said.

The ACEEE said the reports suggests that we have yet to optimize the full range of opportunities for gains in energy and economic productivity, which will require "a set of smart policies to further catalyze the optimal development of information and communications technologies so as to maximize energy and economic productivity."

In its report, TCC also laid out a policy principles for US energy policy:
  • Private-sector leaders need to lead. Companies that talk green, need to walk green, and not wait for government mandates or bailouts.
  • All businesses should develop holistic energy-efficiency strategies that include robust deployment of efficiency-enhancing information and communications technologies.
  • Corporate energy strategies should set high goals and give maximum flexibility to achieve these goals.
  • Business leaders should develop multi-sector initiatives to develop best practices, share information and results and encourage excellence.
  • Government must lead by example. As the nation's largest user of energy, government must expand its own use of energy-efficient technologies, including smart ICT solutions.
  • Government energy strategies should set high goals and give maximum flexibility to achieve these goals.
  • The president should select a federal agency as a "center of energy efficiency excellence."
  • Government should encourage innovation and recognize excellence.
  • Government should invest in research initiatives seeking newer and more transformative ICT solutions that further drive energy efficiency and innovative renewable energy sources.
  • National educational programs to expand awareness, presidential awards for excellence in applying ICT to energy efficiency and extension agent programs to help small- and medium-sized businesses are all valuable.
  • Governments at all levels should use policy levers to encourage efficiency and discourage inefficient uses of energy.
  • Trade and tariff barriers, capital depreciation and tax incentives all influence market behavior.
Dell said, "We have enormous opportunities to reduce energy use while still increasing productivity. Companies like ours will use renewable energy and power-saving software to lower our power consumption and costs, and we'll continue to develop smart technologies that maximize energy use. We need officials here in Washington to support policies that spur the development of those technologies."

John "Skip" Laitner, ACEEE's director of economic policy analysis, said, "Achieving greater levels of energy productivity requires that we start asking the right set of questions about the relationship between ICT systems and total energy use. Rather than focusing exclusively on the energy consumed by ICT, we should instead recognize the ways in which these technologies have helped our production processes become dramatically more efficient."

To view the reports, visit:

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