Energy solutions that are described as “smart”, from smart buildings to smart appliances to the Smart Grid and semiconductors are projected to make a huge impact on the United States’ ability to significantly reduce the cost and use of energy.   Between now and 2030, electricity bills could be reduced by $1.3 trillion assuming that the right investments and policies are in place, eliminating the need by the end of the period for 296 power plants with the use of the semiconductors used to improve the software capabilities of the technologies we use on a daily basis, says a report released recently by the American Council for an Energy-Efficient Economy (ACEEE).

Semiconductors are an Essential Tool for Energy Efficiency

Since their emergence in the 1970s and widespread use in the 1990s, semiconductors have been an essential tool for energy efficiency. Faster, better and cheaper microprocessors, computers, and telecommunications equipment — and the improved software capabilities that drive their performance — have accelerated both the adoption of these technologies and their growing networked use. Semiconductors enable the improved operation of motors and the motor systems that heat and cool our homes, and that provide pumping and mechanical power in our industrial facilities.

Smart Grid Technologies To Play a Major Role in Renewable Energy and Technology Deployment

Energy solutions that are described as “smart” — from smart buildings to smart appliances to the Smart Grid — have semiconductor sensors to measure temperature or other variables, communications chips to receive and transmit data, memory chips to store the information and microcontrollers, microprocessors, and power management chips to adjust energy loads.  Smart grid technologies also enable a more cost-effective deployment of decentralized but cleaner renewable energy resources such as solar panels and wind turbines, which are also enabled by semiconductors. Smart grids may also enable plug-in hybrid cars to stretch gasoline dollars, and provide battery storage units for the nation’s electric generation system.

The study, “Semiconductor Technologies: The Potential to Revolutionize U.S. Energy Productivity“,  finds that compared to the technologies available in 1976,  the entire family of semiconductor-enabled technologies generated a net savings of about 775 billion kilowatt-hours (kWh) of electricity in the year 2006 alone.   The ACEEE report outlines an investment model to achieve the most from semiconductor-enabled energy efficiency.

“We estimate these to begin with a modest $7.1 billion of incremental investments in 2010, rising to as much as $28.7 billion by 2030. The average annual investment over the next two decades is about $22.5 billion. Cumulatively, the market for these new technology investments is about $472 billion over the period 2010 through 2030. But there is a hefty return on these investments. We estimate the electricity bill savings to average just over $61 billion over that same period of analysis, producing a cumulative electricity bill savings on the order of $1.3 trillion over that same time horizon. What’s the bottom line? The savings are about 2.7 times the investment cost.”

John A. “Skip” Laitner, Director, Economic and Social Analysis, American Council for an Energy-Efficient Economy, said: “In many ways, the story of the gains in energy efficiency since the mid 1970s and the mid 1990s, in particular, is the story of the rise of the semiconductor. However, the powerful connection between semiconductors and energy consumption is more than just unappreciated; it is actually misunderstood by some. Despite the immediate growth in electricity demands to power the growing number of devices and technologies, semiconductors have enabled a surprisingly larger energy productivity benefit in that same period.”

Brian Halla, Chairman, Chairman of the Board and CEO, National Semiconductor, said: “For many years, it has been a commonly accepted view that future generations will have to lower their expectations and plan to live in a very different world — a world in which progress will be heavily constrained by energy issues. Fortunately, that pessimistic vision of our future need not come to pass. As the ACEEE study shows, we have the ability to continue to drive economic growth, protect and enhance our environment, and pass on a better world to future generations. Our industry — the semiconductor industry — is hard at work today to invent and produce solutions to the most critical energy issues.”

The Bulk of Recent Energy Savings is Linked to Semiconductors

U.S. energy intensity (energy per constant dollar of GDP) declined an average 1.2 percent annually between 1950 and 1995.  The level of U.S. energy intensity further declined to 2.1 percent annually between 1995 and 2008. More importantly however, this path-breaking analysis argues that a significant proportion of these energy productivity gains — especially in recent years — appear to be the result of the explosive growth in technologies supported by semiconductors and the related shift in the predominant technological paradigm.”  In addition to eliminating the need for 184 additional power plants, the estimated 775 billion kWh savings in 2006 attributed to semiconductor enabled technologies also can be expressed as: $69  billion dollars inbusiness and consumer savings (or $613  per U.S. household); enough power to keep 64.5 million U.S. households going year round; and  the prevention of 479 million megatons of carbon dioxide (CO2) equivalent emissions prevented — a 20 percent cut in electric utility industry emissions linked to climate change.

Huge Additional Energy Efficiency Gains Seen Over The Next 20 Years

“By our calculation here, the cumulative electricity bill savings enabled by semiconductors might exceed $1.3 trillion through 2030. Even after we back out the investment needed to drive the productivity gains, that still translates into a net savings of about $800 billion. Perhaps not surprising, a more productive economy might also support some 935,000 more jobs while substantially reducing environmental impacts — notably a reduction in energy-related carbon dioxide emissions that would exceed 700 million metric tons, also by 2030.”

The need for 300 more power plants could be eliminated. Smart investments “can facilitate productivity gains that reduce electricity
use to only 3,364 billion kWh by 2030.  The resulting savings of 1,242 billion kWh in 2030 means that the economy may actually consume 11 percent less electricity than it did in 2008.  In other words, semiconductor-related technologies may support an economy in 2020 that is 35 percent larger than today, but one that uses seven percent less electricity.  And by 2030 those policies may support an economy that is over 70 percent larger but uses 11 percent less electricity than in 2008… By 2030, we would need to build 296 fewer power plants.”

Major Advances Have Been Made in Semiconductor Industry Energy Efficiency

According to data from the U.S. Census Bureau’s Annual Survey of   Manufacturers (2006), the semiconductor industry purchased 11.8 billion kilowatt hours of electricity in 2006, which was about 1.3 percent of manufacturer consumption and 0.3 percent of total U.S. consumption.  Perhaps even more impressive, the Bureau of Economic Analysis (2007) reports that while the economy as a whole increased energy use by 13 percent over the period 1997 through 2007, the semiconductor industry actually cut energy use by half over that same period.”

Commenting on the study findings, Dave Freeman, TI Fellow and Systems Engineering Manager, Texas Instruments, said: “This report points out the impact a semiconductor device can have when placed between the power source and appliances that use it. Today’s and tomorrow’s energy efficient lighting, motors, and electronics, and even smart grid systems, are made more efficient and practical by “smarter” power controls that deliver information to consumers so they can better manage energy resources. Knowledge is power and power is power, putting them both together multiplies the benefit.”

Semiconductor Enabled Motors Can Raise Energy Efficiency Levels

“According to the report, more than half of all U.S. electricity flows through motors. By 2030, motor related electricity savings largely enabled by semiconductors are likely to exceed 100 billion kilowatt hours,” said Giulio Corradi, Senior Systems Architect & Market Development Manager at Xilinx. “Electrical motors are found in house appliances, vehicles, toys, industrial applications, transportation, robots, and scientific instruments. Most motors today run at a fixed speed, which is as inefficient as a runner sprinting at the same speed when going uphill and downhill. Billions of dollars can be saved using semiconductor enabled variable speed motors.”

© 2009, Tracey de Morsella. All rights reserved. Do not republish.

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Author: Tracey de Morsella (323 Articles)

Tracey de Morsella started her career working as an editor for US Technology Magazine. She used that experience to launch Delaware Valley Network, a publication for professionals in the Greater Philadelphia area. Years later, she used the contacts and resources she acquired to work in executive search specializing in technical and diversity recruitment. She has conducted recruitment training seminars for Wachovia Bank, the Department of Interior and the US Postal Service. During this time, she also created a diversity portal called The Multicultural Advantage and published the Diversity Recruitment Advertising Toolkit, a directory of recruiting resources for human resources professionals. Her career and recruitment articles have appeared in numerous publications and web portals including Woman Engineer Magazine,, Job Search Channel, Workplace Diversity Magazine, Society for Human Resource Management web site, NSBE Engineering Magazine,, and Human Resource Consultants Association Newsletter. Her work with technology professionals drew her to pursuing training and work in web development, which led to a stint at Merrill Lynch as an Intranet Manager. In March, she decided to combine her technical and career management expertise with her passion for the environment, and with her husband, launched The Green Economy Post, a blog providing green career information and covering the impact of the environment, sustainable building, cleantech and renewable energy on the US economy. Her sustainability articles have appeared on Industrial Maintenance & Plant Operation, Chem.Info,FastCompany and CleanTechies.