Energy bill could open Southeast’s EE market

By Elisa Wood

July 2, 2009

I live a kind of Tale of Two Cities, or rather tale of two regions. My work requires that I spend a lot of time covering the Northeast power markets, but I live in Southeast. So after reporting on the rich world of efficiency incentives available in places like Connecticut, Massachusetts and New York, wasn’t I surprised to find my local utility offers pauper’s fare, nothing more than an energy audit.

This is in keeping with a culture of inefficiency in the Southeast. For example, Energy Star appliances have achieved only 20% market penetration in the region, compared with a 30% penetration elsewhere.

But this culture could change soon because of the politics behind the proposed federal renewable portfolio standard. RPS opponents in the Southeast say the region can’t afford the standard because it lacks vast wind and solar resources http://www.renewableenergyworld.com/rea/news/article/2009/06/winning-dixie-drawing-in-the-southeastern-us.

True or not, the Southeast was given a reprieve in the Waxman-Markey bill passed by the House June 26. If states cannot secure enough renewable energy to meet the standard, they can substitute with some energy efficiency. The bill requires that 6% of power come from renewables in 2012 rising to 20% by 2020. But states can substitute up to 25% of the requirement with energy efficiency. Moreover, a state governor may petition to increase the efficiency portion to 40%. http://www.usgbc.org/ShowFile.aspx?DocumentID=6070

So if the Southeast can’t – or won’t – develop enough renewable energy to meet the RPS, it can rely on energy efficiency to fulfill nearly half the requirement. As a result, we could see a broad new market for energy efficiency build up in the Southeast.  The World Resources Institute underscored this possibility in a brief, “Southeast Energy Opportunities,” circulated last week. The Southeast has the potential to reduce total expected electricity use 11% by 2015, enough to meet most of the region’s new power needs through 2015, according to the brief. That may be why the Rocky Mountain Institute ranked six of the Southeast states in the top ten for energy efficiency potential.

Efficiency advocates see the Southeast as an important market because its households tend to heat and cool with electric energy. In fact, electricity consumption per person is almost 40% higher than the national average. Moreover, the region has the fastest growing population in the United States. Greater population equals more demand for electricity equals more power plants – unless the need is offset through efficiency.

Of course, none of this is set stone yet. By most reports the energy bill faces rough going in the Senate, which is expected to take it up in the fall. http://www.foleyhoag.com/NewsCenter/Publications/Alerts/Environmental/Environmental_Alert-070109.aspx.

So those of us in the Southeast may look northward with envy for awhile longer – but perhaps eventually the tale will take a turn.

Visit Elisa Wood at www.realenergywriters.com and pick up her free Energy Efficiency Markets podcast and newsletter.

Reality check: Is green arrogant?

By Elisa Wood

June 25, 2009

During a recent interview, a utility executive used the phrase “the arrogance of renewable energy.” He was talking about the need to keep costs in check and implying that green energy businesses do not.

The executive asked that I not attach his name to the phrase. He was afraid he would anger those in the renewable energy world with whom he does business. Not so long ago, utilities publicly criticized renewable energy without a second thought. His reticence to do so underscored to me just how powerful the green energy movement has become in the United States. From town councilors up to the US President, the political official is rare who does not back green energy.

To quote FDR, with power comes responsibility. In a world where green energy is receiving unprecedented public funds, the industry needs to ensure that public money is not squandered.

For energy efficiency, this means accurate measurement of savings, particularly in performance contracting. No fudging. Fortunately, the IT world increasingly offers technology that can pinpoint with accuracy if energy efficient motors, fans, lighting and other equipment lives up to its promise. http://www.onsetcomp.com/resources/white_papers.

Equally important, organizations like ASHRAE and the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) are looking for more meaningful ways to quantify energy savings.

Green designs that work in theory do not always work in practice. An empty building does always behave the same way as a building with people filling the space. That is why the US Green Building Council plans to require operational performance data on a recurring basis as a precondition for LEED certification. http://www.usgbc.org/Docs/News/MPRs%200609.pdf

“Today there is all too often a disconnect, or performance gap, between the energy modeling done during the design phase and what actually happens during daily operation after the building is constructed,” said Scot Horst, senior vice president of LEED, U.S. Green Building Council. “We’re convinced that ongoing monitoring and reporting of data is the single best way to drive higher building performance because it will bring to light external issues such as occupant behavior or unanticipated building usage patterns, all key factors that influence performance.”

Horst added: “Similar to the sticker on a new car that says the car will get 30 miles to the gallon — the car is calibrated to perform, but it’s also reliant on the driver’s habits.”

Meanwhile, ASHRAE is working on a prototype label, or “Building EQ” that measures energy use in a building in two ways. A new building initially receives an asset rating, based on its design. After its performance is monitored for a year and data is collected on actual energy use, the building becomes eligible for an operational rating http://www.ashrae.org/pressroom/detail/17194.

“When potential building tenants and owners have information on the properties they are interested in, they can understand the full cost of their investment and place a value on the energy efficiency of a building. ASHRAE’s label will help building owners differentiate their product in a technically sound manner while providing tenants with the tools they need to select energy-efficient spaces,” said Ron Jarnagin, who chairs the committee developing the label.

Accurate measuring and monitoring increasingly seems to be the name of the game in a world where use of public funds demands accountability. Performance labels are a far better alternative for the green energy world than labels of arrogance.

Visit Elisa Wood at www.realenergywriters.com and pick up her free Energy Efficiency Markets podcast and newsletter.

Has the clean energy economy arrived?

By Elisa Wood

June 18, 2009

We’ve seen many forecasts that show the clean energy industry boosting future US job growth. But a Pew Charitable Trust study released last week indicates that green job creation isn’t just a thing of the future; it’s been emerging for several years.

From 1998 and 2007, clean energy jobs increased by 9.1%, while total jobs grew by only 3.7% nationally, according to “The Clean Energy Economy.” http://www.pewtrusts.org. In all, clean technology accounted for 770,000 jobs in 68,200 businesses by 2007.

States showed a similar trend.  The clean energy economy outperformed overall job growth in 38 states and the District of Columbia during the same period.

What’s interesting is that the growth occurred before the influx of federal stimulus funds for clean energy. So what will the clean energy job market look like after $85 billion makes its way into the economy? Lori Grange, interim deputy director of the Pew Center on the States,  envisions nothing less than “explosive growth.”

The report also shows that Americans are clearly on board with the idea of pursuing energy efficiency. In 2007, alone, consumers purchased more than 500 million Energy Star® products, up 67% from the previous year.

As the economy recovers, what kind of jobs will the efficiency industry produce?  Expect demand for  workers “who make and distribute software and meters to monitor energy consumption and who manufacture and install efficient glass and lighting, along with service-related jobs that help companies and individuals improve home or business energy use,” the report says.

Regulators see the writing on the wall in New York, which intends to meet 45% of its energy needs from renewables and efficiency by 2015. They are concerned the state will lack enough clean energy workers. So the state public service commission this week approved $6.6 million to train workers for energy efficiency jobs.

The commission described the money as only a “bridge” until it can get federal stimulus dollars to further ramp up training, and said it hopes to avoid “bottlenecks” in programs caused by lack of workers.

True, the clean energy economy has been hurt like all sectors. Venture capital investments dropped in 2008, Pew says. But the downturn appears to be only a dip in what has been – and by all accounts will be — an upward trajectory in clean energy growth for several years.

Visit Elisa Wood at www.realenergywriters.com and pick up her free Energy Efficiency Markets podcast and newsletter.

Next: The wattcom boom

By Elisa Wood

June 11, 2009

I was at a meeting about three years ago where state energy commissioners and power plant developers were debating new market rules, some to take effect almost immediately, others five years out. A wise commissioner looked around the room and said something like: “All that matters are the immediate rules because everything will be different in five years. In fact, most of you won’t be working for the same company you are today.”

Lo and behold, he was right. When I think of the people at the meeting, most are already elsewhere – and only three years have gone by. Some of the companies they represented, major players in the fossil fuel arena, are struggling for survival.  And where is the commissioner who made the statement? He now works for a wind energy developer.

Who will be the new, big market entrants in the next five years?  Here is a clue: More and more energy announcements that come across my desk are not from energy companies. They are from IT companies: Google, Hewlett Packard, IBM.

This makes sense given that a necessary marriage between IT and energy must occur for the development of the smart grid and user-friendly energy efficiency devices. Clearly, the IT world sees opportunity in energy.

Farah Saeed, a senior consultant for Frost & Sullivan, put it this way: “In the coming years, competition expects to intensify as non-energy related IT focused companies expand their presence in the utility sector. Companies such as IBM, Cisco, Oracle, and HP acknowledge the fact that Internet-enabled grid applications present opportunities to serve the utility market. Networks developed to support AMI [advanced metering initiatives] technologies such as home area networking (HAN) and backhaul networks, as well as enterprise software to support asset management, invites the expertise of IT technology pioneers.”

I’m predicting a “wattcom” boom. Okay, maybe the name is corny. But catch up with me in five years – probably less. Let’s see who’s in the room.

Visit Elisa Wood at www.realenergywriters.com and pick up her free Energy Efficiency Markets podcast and newsletter.

Where is energy’s cell phone?

By Elisa Wood

June 4, 2009

Electric industry restructuring often gets criticized for failing to deliver the goods. It was supposed to not only drive down rates, but also spark innovative new technologies.  After all, deregulation of the telecommunications industry gave us the cell phone. Where is energy’s nifty gadget?

Initiated more than a decade ago, electric deregulation has produced no such consumer hit. But it has led to innovation, albeit more complex and less tangible than the cell phone. For an example, listen to Lisa Cohn’s podcast: “How states can best use energy efficiency stimulus money” with Mark Sinclair of the Clean Energy States Alliance (CESA) http://www.realwriters.net/rew/rtlnkmr.htm.

Sinclair describes how a dozen or more states have served as laboratories over the last decade, laying the groundwork for today’s federal push to advance clean energy as a jobs builder. What got these states started? It turns out it was restructuring. CESA’s founder, Lew Milford, was an early advocate of restructuring and instrumental in the creation of rules in key states. He saw restructuring as an opportunity to open the door for development of clean energy, then largely a fringe resource. Milford pushed for a special utility rate structure, a systems benefit charge, that would channel funds into laboratory-like exploration at the state level.

Much of clean energy’s progress in the marketplace is due to these state programs:  “People tend to think somehow that these projects have appeared magically and that’s not the case… states have spent a significant amount of money putting dollars on the ground and then leveraging private capital to make those projects,” Milford says in an interview with E&E TV http://www.cleanenergystates.org/press/Milford_OnPoint-1.14.09_text.pdf.

Those states now offer specific templates for building clean energy economies that others can follow as they receive federal stimulus dollars. The clean energy states have tested rebates, grants and loans to stimulate markets. They’ve seen where poor regulation slows installations. They know what attracts clean energy companies and what drives them away.

By studying the work of experienced states, those new to clean energy can bypass years of experimentation.  So there lies an example of innovation from electric industry restructuring. Restructuring provided a mechanism for states to experiment with clean energy. Now, these pioneering efforts will save a lot of time and money for the states that are new to clean energy and find themselves with little time to ramp up the industry and attract jobs. True, electric restructuring did not produce a gadget that you can hold in your hand; instead it produced a clean energy roadmap, one that by many accounts could help create a lot of economic activity at time when it is most needed.

Visit Elisa Wood at www.realenergywriters.com and pick up her free Energy Efficiency Markets podcast and newsletter.

Golf carts on interstate highways?

By Elisa Wood

May 28, 2009

If you trust the television images, it appears that soon we will all drive cars the size of golf carts because of Obama’s new fuel standards. Newscast after newscast illustrated the new 35.5 CAFÉ (Corporate Average Fuel Economy) standard with a two-seater microcar. In some cases the image was juxtaposed with a threatening-looking SUV, usually black — Darth Vader on his way to crush the rebellion.

The message? Be afraid. Be very afraid. And to be honest, I was. My first thought? There is no way my kids are getting in a microcar.

Since then, however, I’ve looked into safety and small cars. True, small cars can be unsafe – but not necessarily.

Greencar.com offers an informative article by Kellen Schefter http://www.greencar.com/articles/smart-car-offers-drivers-new-high-mpg-option-top-crash-rating.php. Shefter describes crash tests by the Insurance Institute for Highway Safety on Daimler AG’s 2008 smart fortwo. It is not as destructible as the golf cart it resembles. On the contrary, the smart fortwo earned the institute’s best ratings for front and side crash protection. For rear crashes, it was rated acceptable.

Schefter explains the technology behind the car’s crashworthiness. The smart fortwo is built to distribute the impact of a crash over its entire body; the rear-mounted engine breaks away and slides underneath the car if it is hit from behind, “absorbing energy and reducing the rebound inherent in such a stiff structure.” And the car has a short wheelbase so that in a side collision, it is more likely to hit an energy-absorbing axle.

In any case, we may not need small cars to meet fuel efficiency standards, according to the Rocky Mountain Institute. But the cars will need to be light. Lack of vehicle weight is typically linked to poor crash performance.  RMI says, however, that light weight, like small size, need not mean danger on the road. The organization plans to issue a study in July that illustrates how big cars made out of light materials can have “crash safety comparable to, or better than, that of a similarly sized heavy vehicle,” according to a paper RMI recently posted on its website. Safety depends on good engineering. Because the engines need not be so big in the light car, “the crumple zone” can be larger, creating greater safety, RMI says. http://www.rmi.org/sitepages/pid603.php.

Still, the biggest challenge for the car industry may not be one of engineering, but psychology.  Can marketing efforts overcome what Schefter calls the “bigger-is-better intuition” of the safety-minded American car buyer? As I think about my kids in a microcar, I realize that I’ll be a good test case.

Visit Elisa Wood at www.realenergywriters.com and pick up her free Energy Efficiency Markets podcast and newsletter.

Will society unplug?

By Elisa Wood

May 21, 2009

As a society, we’re accused of being too plugged-in, too reliant on our computers, televisions, and charged-up cell phones. Turns out, we are willing to unplug.

A study by SmartPower (http://www.smartpower.org/) found that unplugging unused appliances, those sucking up vampire energy, is an energy savings act people are willing to do. And they don’t just say they will unplug – they do unplug.

This is an important distinction because often people tell researchers that they intend to conserve power or buy renewable energy. But when it comes time to do act, they balk. SmartPower was able to discern where and when people walk-the-walk through a “Living Diary” study, part of a two-year effort in New England to see how the economy, volatile energy prices and environmental concerns motivate consumers.

Smartpower followed the activities of 81 people for two weeks. The participants were given daily questions, homework and tasks, which led to over 1,000 diary entries.

“Unplugging was the most frequent efficiency experience. Panelists reported that it was the easiest to perform, required the least sacrifice and was the most universally relevant to all participants,” SmartPower said in recent comments filed before the Connecticut Department of Public Utility Control.

Such research becomes increasingly important as the industry seeks ways to spur consumers to act in a more energy efficient way, an approach known as “residential behavioral strategy.”

In Connecticut, SmartPower and two other companies have proposed an ambitious behavioral strategy program intended to encourage people to cut energy use 20% by 2020. The trio – which also includes Earth Markets (http://earthmarkets.com/), a finance company, and Efficiency 2.0 (http://efficiency20.com/), a software firm – offers consumers several goodies, among them free compact fluorescent lights and software to monitor energy use online.

But that’s not all. The program includes two of the biggest all-time motivators for the US consumer: beating the Jones and earning cash. Communities compete to see who saves the most energy and the results appear on line for all to see. In addition, participants have the chance to earn money through the sale of efficiency certificates or “white tags,” a currency of value in Connecticut. Consumers and businesses can earn a certificate for each megawatthour of energy they save. They sell the white tags to utilities and others who must, under state law, produce or buy a certain number each year to help the state achieve its efficiency goals.

The program must still win regulatory approval (http://www.dpuc.state.ct.us/dockcurr.nsf/(Web+Main+View/Search+Electric)?OpenView&StartKey=05-07-19RE02) . But if it does, its 200,000 customers would not only earn money from white tags but also save money on their energy bills – for a total financial gain estimated to be $100 million.

Not a bad benefit. Definitely worth the time of unplugging the appliances at night.

Visit Elisa Wood at www.realenergywriters.com and pick up her free Energy Efficiency Markets podcast and newsletter.

The one energy efficiency report to read

By Elisa Wood

May 14, 2009

Jon Wellinghoff, chairman of the Federal Energy Regulatory Commission, raised a lot of eyebrows recently when he suggested that the US may no longer need to build conventional power plants – that efficiency and renewable energy might meet our needs.

He has since clarified his position, saying much will depend on how we think about energy, its use in the system, and market response.

Still, critics say he overestimates green technologies. Are they right? Reading over the most recent report by the American Council for an Energy-Efficient Economy gives one pause about underestimating technology.

We know that semiconductors have given us computers, cell phones, the Internet – they’ve changed the way we live and work. But often semiconductors are thought of as the source of energy gluttony. We are all plugged in much more than we were 20 years ago.

Steve Nadel, ACEEE director, calls this “the high tech energy paradox,” in his introduction to the report. “Analysts tend to pay more attention to the energy-consuming characteristics of semiconductor devices than to their broader, economy-wide, energy-saving capacity.”

Turns out that in making life easier for us, semiconductors also have been taking a lot of strain off our power system. ACEEE looked at how we might have accomplished tasks without the semi-conductor and found it would have taken a lot more energy.

“Computers and servers show us that it can be easier to make decisions, and that it is easier to move electrons than it is to physically move people and goods,” says the report.

In fact, technologies that use semiconductors saved us 775 billion kWh in 2006 alone. Without semiconductors we would have used 20 percent more power that year. Or put more strikingly, had it not been for semiconductors, we would have built 184 additional, large power plants.

The report goes on to extrapolate that the semiconductor industry is likely to lead to even greater savings in the future.

Semiconductors could support an economy in 2020 that is 35 percent larger than today, but uses seven percent less electricity. By 2030 the economy could be 70 percent larger and use 11 percent less power. What does this mean in practical terms? About $1.7 billion in electricity savings, a lot less carbon dioxide and many more jobs, says the report.

Such startling projections make Wellinghoff’s statement seem less dramatic.

Here I’m in danger of sounding like a sales pitch on the jacket of a paperback. But if you read only one energy efficiency report this year, make it this one: “Semiconductor Technologies: the Potential to Revolutionize U.S. Energy Productivity. http://www.aceee.org/press/e094pr.htm. It is an eye opener.

Visit Elisa Wood at www.realenergywriters.com and pick up her free Energy Efficiency Markets podcast and newsletter.

Businesses like efficiency, but hold back

By Elisa Wood

May 7, 2009

“It’s the economy, stupid,” the famous line of political strategist James Carville, seems even more relevant now than when he uttered it during Clinton’s 1992 campaign. A recent survey on executives’ attitudes shows that energy efficiency hasn’t escaped the shadow of recession, despite strong support for the resource.

Johnson Controls and the International Facility Management Association asked 1,400 business executives in April what they think of energy efficiency. They like it. A lot.

Seventy one percent said they pay more attention to energy efficiency than they did a year ago; 51 percent see energy management as extremely or very important; 45 percent plan to use efficiency as their top strategy to reduce carbon dioxide emissions.

Yet, the survey also found businesses holding back on making investments. The problem?  “Economic and regulatory uncertainty,” says C. David Myers, president of Johnson Controls Building Efficiency division, in a May 6 news release.

Energy prices have dropped significantly over the last year. But businesses apparently do not feel confident enough about the future to prepare to take the savings and invest it in energy efficiency — in preparation for the next jump in energy prices. In fact, the survey revealed a likely 10 percent decrease from last year in the use of facility capital budgets to fund energy efficiency projects. It also showed a six percent drop in the number of businesses planning to use their operation budgets to invest in efficiency.

Not surprising, nearly half of those interviewed cited lack of capital as a barrier to pursuing efficiency. However, if Washington plays it right, efficiency investment should rebound once the economy does. Business leaders believe incentives from utilities or government will drive the investment, according to the survey.  Eighty-five percent expect either legislation mandating energy efficiency or carbon reduction within two years.

Businesses are understandably hesitant to risk capital until they know the specifics about an energy efficiency portfolio standard and carbon requirements now under debate in Congress. Perhaps the slogan for this point in history should be: “It’s about the economy, stupid…and Washington.”

More information on the survey is available at: http://www.johnsoncontrols.com/.

Visit Elisa Wood at www.realenergywriters.com and pick up her free Energy Efficiency Markets podcast and newsletter.

Efficiency stimulus will lower energy bills, says federal report

By Elisa Wood

April 30, 2009

Depending on your position, the federal stimulus money is either a jobs builder or a national budget buster. The Energy Information Administration offers another take. In a recent analysis, the EIA finds that stimulus money should reduce what consumers and businesses pay to heat, cool and light buildings.

The federal agency this month updated its annual energy outlook to compare how energy costs would fare with and without the American Recovery and Reinvestment Act. http://www.eia.doe.gov/oiaf/servicerpt/stimulus/index.html.

The stimulus package delivers about $12.5 billion for energy efficiency improvements in homes and buildings. Those upgrades should cut homeowner bills an average of $64 annually (in real 2007 dollars) over the next two decades. Homeowners will reduce use of heat 1.7%, and air conditioning 3.4% by 2030, the report says. Likewise, commercial buildings should see energy costs drop by an average of $5.7 billion, or 2.7% annually between 2010 and 2030. In all, the report pegs cost cuts for home and building owners in 2020 at $13 billion, or 2.6%, and in 2030 at $21 billion, or 3%.

In addition, expect to see a lot more solar panels and small wind turbines powering stores and offices very soon as a result of significant tax credits and loan guarantees. The stimulus funds should lead to 121 MW more of solar units on commercial buildings by 2011, a 15% jump, and 120 MW in distributed wind turbines by 2016, a 527% jump.

The EIA does not typically update its annual outlook after it is published. But the federal agency decided to do so this year because it was clear that the stimulus money, approved in February, would significantly alter its 2009 outlook, which was released at the end of last year. Indeed, the information may help inform national policy as Congress debates ways to avert higher energy costs under new programs being contemplated, such as carbon cap-and-trade and a renewable energy standard.

Visit Elisa Wood at www.realenergywriters.com and pick up her free Energy Efficiency Markets podcast and newsletter.