What are the benefits of public sector energy management?

Direct benefits from more efficient energy management in government facilities and operations include:

  • lower energy bills, which translate to savings in tax dollars;
  • reduced environmental damages (e.g., greenhouse gas emissions);
  • less demand on electric utility systems; and
  • reduced dependence on imported oil.

Even more significantly, government “leadership by example” can be a powerful force to shift the market toward energy efficiency.

Considered as a whole, government facilities and functions are usually a country's largest energy user and biggest purchaser of energy consuming equipment. The government sector’s buying power and example to others can generate broader demand for energy-efficient products and services, creating entry markets for domestic suppliers and stimulating competition in providing high-efficiency products and services. By focusing government investment, procurement, and operating practices on energy-efficient buildings, products, and services, the public sector can create a strong, sustained, buyer-led shift in the market toward energy efficiency.

Every country has important opportunities for more efficient energy management in government facilities and operations (such as roads and transit, water and wastewater, and other public services and infrastructure).

How important is the government sector as a share of the total economy?

When all areas of government — federal, state, and local levels, as well as entities such as public schools and universities, and government-owned enterprises (e.g., public utilities or transit authorities) — are considered together, their proportion of total economic activity is striking. In the U.S., for instance, government’s share of the country’s GDP is about 18%. Worldwide, the percentage varies from 10% to 25%. This is significant for two reasons:

  • National energy-savings potential in this sector is often enormous — generally in the tens of millions of dollars.
  • The government sector can exert major influence over the entire market both by its direct actions and also through its openly stated policies, specifications, and purchasing criteria.

PePS contributors have published a paper, "Market Leadership by Example: Government Sector Energy Efficiency in Developing Countries," providing the policy rationale and background for government sector energy management programs. The paper is available for download in PDF format:

Van Wie McGrory, L. et al. Market Leadership by Example: Government Sector Energy Efficiency in Developing Countries. In Proceedings, 2002 Summer Study on Energy Efficiency in Buildings. Washington, DC: American Council for an Energy-Efficient Economy. 2002.