Lawrence Berkeley National Laboratory

Although the government sector represents only 10 to 15 percent of the economy in most countries, carefully targeted public procurement can play a significant role in market transformation through its influence on both buyers and suppliers. Government leadership in energy-efficient purchasing can set an example for other buyers, while creating opportunities for leading manufacturers and distributors to increase their sales and market share by offering energy-efficient products at competitive prices. Under proper circumstances, a highly visible government purchasing policy can have a disproportionately large influence on the market for efficient products. In the United States, President Bush signed an Executive Order in 2001 directing all federal agencies to buy products with low standby power (1 watt or less where possible). This represents a deliberate choice to use government purchasing - rather than regulations or incentives - as a market-based strategy to encourage energy savings. It also builds upon existing efforts to encourage Federal purchase of energy-efficient products (Energy Star products and others in the top 25th percentile of efficiency). This paper summarizes the Federal Energy Management Program s first 18 months of experience in implementing this Executive Order, including analysis of data on standby power, interactions with manufacturers and industry groups, and the relationship between these efforts and other federal programs concerning product labelling, testing, rating, and efficiency standards. After five years of implementing low-standby power purchasing, we estimate energy savings for federal agencies alone at about 230 GWh/year (worth US$14 million), with spillover effects on the broader market that will save all US consumers nearly 4000 GWh/year (US$300 million).