Is green energy our new plastics industry?

By Elisa Wood

December 17, 2009

If The Graduate were written today, Mr. McGuire’s career tip to Benjamin probably would have been “green,” rather than “plastics.” But it’s likely Benjamin would have responded in the same quizzical way: “Just how do you mean that, sir?”

It was difficult to envision the vast number of new products, businesses and careers that would emerge from the plastics industry following World War II. The same is true for the green energy industry today. A report issued December 16 by PricewaterhouseCoopers sheds some light.http://www.pwc.com/us/cleantechrevolution

To know where the business opportunities will be, watch the unusual alliances forming among industries, according to “Cleantech Revolution: Building Smart Infrastructures.” We see hints already as automakers, utilities, battery makers and communications providers ally in preparation for an expected $165 billion smart grid build-out. The report cites several examples, among them:

• Nissan’s partnership with San Diego Gas & Electric to build electric vehicle charging stations
• Echelon and T-Mobile’s deal to create wireless networks connecting utilities to smart meters
• Cisco assisting Duke Energy in building a smart grid

“As the build-out gains traction, it has the potential to support a proliferation of new businesses across sectors, much like the evolution of both the semiconductor industry and the Internet,” says Tim Carey, PWC U.S. clean technology leader.

Don’t be surprised, says the report, to see a national retail store chain partner with an electric battery maker to install charging stations nationwide for plug-in electric vehicles. A new wave of corporate mergers and acquisitions also could be in the cards. The opportunities are vast, especially when you consider the size of the smart grid. The US has 160 million households awaiting installation of smart meters. These new devices will require changes in the way we operate our electrical infrastructure, which encompasses 3,100 utilities, 10,000 power plants, 5,600 distributed energy facilities and 157,000 miles of high voltage transmission wires, says the report. How many better mousetraps can a system of this size support? More than we can imagine.

The clean technology, boom, however, depends heavily on consumer acceptance. If consumers find smart meters too complicated or plug-in hybrids unreliable, the game is over. To avoid this problem, organizations like the American Council for an Energy Efficient Economy are focusing on understanding customer motivation.http://www.aceee.org/conf/09becc/09beccindex.htm.

Use of smart grid technologies must become “pervasive and ingrained,” says the PWC report. Sunil Sharan, of the Center for American Progress, sees the smart meter becoming like the Blackberry, “with all sorts of applications.” Indeed, energy industry insiders often describe the next game changer – whatever it will be – as the cell phone of energy. But given how integral electricity is to our everyday lives, clean technologies need to become everyman products. Out of the corporate alliances, the mergers, the breakthroughs and the investment deals, maybe it’s not energy’s cell phone that will make fortunes, but its plastic wrap.

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

Obama, poker and what 2010 holds for energy efficiency

By Elisa Wood

December 10, 2009

Jon Stewart said it best: Obama is a lousy poker payer. Lucky thing, too, for the energy efficiency industry as it heads into 2010.

Stewart’s December 8 “The Daily Show” aired a clip of Obama recently telling business leaders: “I don’t want to tip our hand too much, but one of the things I would be surprised if we don’t end up moving forward on is an aggressive agenda for energy efficiency and weatherization.”

Tip his hand? In fact, as Stewart pointed out, Obama has shown that hand broadly to the world for the last year. Starting with his January 2009 inaugural speech, Obama buoyed the clean energy industry by advancing renewable energy, a first for a US president in that forum. But that turned out to be just the start. In talk after talk this year, he pushed efficiency. If US voters didn’t know the term ‘weatherization’ before, they know it now. What could be better publicity for a product than having it endorsed by the leader of the free world?

To say 2009 was a banner year for the energy efficiency industry is an understatement. Under Obama’s watch, the federal government has channeled $20 billion in stimulus dollars to energy efficiency and now promises more from bailout funds returned by banks.

While the money – and Obama’s support – was the big story for 2009 and continues to be going into 2010, it is important to remember that electric energy is ultimately a local industry in the United States. What happens before state public utility commissions and regional regulatory bodies often has greatest influence.

To that end here a few local trends of 2009 that may grow in 2010.

*Efficiency as a first fuel. Environment Northeast has been successful in convincing several New England states to consider efficiency to be the first fuel in portfolio planning. That means when utilities plan resources, they must secure all cost effective energy efficiency before pursuing power plant development or power purchases. http://www.env-ne.org/

*Decoupling. Utilities have little incentive to encourage energy savings if they earn their profits from selling power. Decoupling changes utility accounting and cost recovery by delinking profits from sales. California and Massachusetts are examples of states with full decoupling and their utilities have among the most aggressive efficiency programs in the country. Several other states partially use the approach; others are considering adopting it.

*Energy efficiency portfolio standards. Similar to renewable portfolio standards, EEPS require that utilities, and in some cases competitive retail suppliers, achieve certain energy savings goals. Federal proposals are under consideration for a national EEPS. That may or may not happen. But 19 states now have the standards; look for more to pursue the approach.

What else does the EE industry have to look forward to in 2010? Please post what you see in your crystal ball.

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

How many negawatts do I need before I retire?

By Elisa Wood

December 3, 2009

A candy shop owner on Cape Cod offers a new approach to build a retirement portfolio: put solar panels on your roof.

“We looked at the stock market last year and it didn’t look too good so we decided to invest in electricity,” said Ray Hebert, owner of Stage Stop Candy in Dennisport, in an article on wickedlocal.com by Nicole Muller. http://www.wickedlocal.com/dennis/news/business/x1792920283/PHOTO-GALLERY-Solar-energy-to-power-chocolate-production-at-Dennisport-shop

Thanks to today’s generous state and federal subsidies, Hebert expects to recover costs in five years and then begin collecting a return on investment of 13.8%. “What investment can guarantee that?” he asks. “And since electricity costs are expected to climb, my profit will go up, up, up over time.” He plans to channel the savings into his retirement account.

I’m not a financial planner, so won’t pretend to know if Hebert’s numbers are correct. But his reasoning points out a new and growing way consumers and businesses have begun to think about electricity. Efficiency allows them to not only save money, but also to earn it.

In Hebert’s case, he is saving money by using a generation source that has no fuel costs – sunshine is free – and by taking advantage of Massachusetts net metering laws, which allow consumers to sell back to the local utility any excess power generated by their solar panels.

But there are other ways, as well, that consumers can earn a return on electricity savings. Neighboring Connecticut, for example, has become the king of monetizing energy savings through its innovative energy efficiency certificates. The certificates represent energy savings (negawatts) businesses achieve when they install efficient technologies. Each megawatt-hour of savings equates to one certificate. The businesses then sell the certificates to utilities or retail electricity suppliers who use them to prove to regulators that they’ve achieved state-mandated levels of energy savings.

So far, the Connecticut program is largely confined to businesses, although homeowners are eligible. Private companies have been trying to come up with ways the householder can easily participate, but are having trouble convincing state regulators that their programs can work. One company proposed a green stamps approach, where customers could buy lights, appliances and other efficiency equipment through certificate savings. (See the CPower case before the Connecticut Department of Public Utility Control: http://www.dpuc.state.ct.us/DOCKCURR.NSF/4ad307989ca5ed2a85257523004e0191/d122623c2e5eab5c8525767400500afc?OpenDocument&scrollTop=545)

Programs that monetize electricity savings are likely to grow as more utilities install smart meters in homes and businesses. Smart meters let consumers see when and how they use electricity, so that they can better control costs. Connecticut Light & Power found that consumers who participated in a smart meter pilot program liked using the devices, although those who did so for environmental reasons were more satisfied than those who participated to save money. This isn’t surprising since residential customers only saved $24.69 on average from June 1 to August 31, 2009. http://nuwnotes1.nu.com/apps/mediarelease/clp-pr.nsf/0/0E66EBF11810786085257673004EA13B?OpenDocument

Would the savings be more meaningful if packaged into an investment that increases the value of the money — the Cape Cod candy shop owner’s approach? The possibilities are many: Pairing energy efficiency companies with financial firms to offer energy savings retirement accounts or college funds, or perhaps channeling the money into tax deductible donations. Whatever the case, translating kilowatt-hour savings into concrete financial products for consumers offers intriguing market possibilities for the electricity industry.

http://www.wickedlocal.com/dennis/news/business/x1792920283/PHOTO-GALLERY-Solar-energy-to-power-chocolate-production-at-Dennisport-shop

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

What does the US/China agreement mean for efficiency?

By Elisa Wood

November 19, 2009

The energy efficiency market has a gawky quality. It is not exactly one market but a conglomeration of various industries as diverse as appliance manufacturers, energy auditors, smart meter software designers and cogeneration developers. They are unified only in their ability to save energy.

All arms and legs as it may appear, the efficiency market seems ready to shoot to a new level of maturity. If that wasn’t apparent before, it became so this week with an announcement out of Obama’s visit to Beijing that the US and China will collaborate to curb their combined $1.5 trillion annual energy appetite.

How will this change the efficiency industry?

Given that the two nations consume 40% of the world’s energy, the collaboration could bring new economies of scale to efficiency. The agreement calls for:

• Greening buildings with better building codes and labels, advanced energy rating systems, and more emphasis on training building inspectors.

• Reducing energy waste in industry through benchmarking, on-site energy audits and tools and training programs to support these activities.

• Improving energy efficient consumer products by harmonizing test procedures and performance metrics. The two countries will exchange best practices for labeling systems and promote awareness of the benefits of energy efficient products.

• Working together to demonstrate energy efficient technologies and design practices, building on the research and development of the new U.S.-China Clean Energy Research Center.

• Engaging the private sector in promoting energy efficiency and expanding bilateral trade and investment.

With this new scale, energy services companies (ESCos) may follow a growth pattern similar to that of US solar firms. Just a few years ago, solar installation companies tended to of the two-guys-and-a-truck variety. The operations were small and local, just as many ESCos are now. Then companies like SunEdison came along and began acquiring the smaller ventures. Soon solar had a national footprint, and not long after, an international footprint as European and Chinese companies began buying American firms.

Solar seemed to mature into an international market overnight. Efficiency may now have the same opportunity.

See details on the US/Chinese collaboration here: http://www.energy.gov/news2009/documents2009/US-China_Fact_Sheet_Efficiency_Action_Plan.pdf

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

No place like home for energy savings

By Elisa Wood

November 12, 2009

Apparently there is no place like home, even when it comes to fulfilling lofty wishes like fixing our energy supply.

A recent White House task force on the middle class finds that our homes generate more than 20% of the nation’s carbon dioxide emissions. If we make our houses more efficient, we can significantly cut emissions and reduce energy use by 40%, a move that could lower our bills by $21 billion annually.

But who has the extra cash in this economy for better windows and an updated heating system?

The report recommends leveraging some of the $80 billion in energy and environment stimulus funds to set up financing mechanisms that let homeowners pay over time and avoid the upfront hit.

Already, to that end, several states have created low-interest revolving loan funds. Nebraska has set aside $11 million. Florida is offering $10 million, particularly for solar hot water installations. And yes, Dorothy, you can go home again. Kansas has gotten into the act with $34 million in efficiency loans.

In addition, the task force encourages federally funded pilot programs using ‘Property Assessed Clean Energy’ financing. Now available in a handful of cities, these programs finance clean energy efforts on property tax bills. Ideally, the efficiency retrofits will reduce energy bills at least as much as property payments rise, so that the homeowner faces no net increase in expenses. Particularly interesting, the loan stays with the property – not the owner. So if the homeowner decides to sell, the new owner, who reaps the benefits of the efficient home, also pays any remaining costs of the retrofit.

Similarly, the report calls for making energy efficiency mortgages more available. The US Dept. of Housing and Urban Development needs to work with Fannie Mae and Freddie Mac to establish uniform procedures for such mortgage products, the report says. In addition, the home appraisal industry must develop methods to evaluate a home’s energy efficiency.

And finally, the report says the housing industry deserves the same opportunity given to the appliance industry with Energy Star labels. Americans saved $19 billion on their utility bills last year with Energy Star appliances, according to the report. A similar label for homes would help buyers in their shopping and provide a benchmark for auditors, retrofitters, lenders and realtors.

To realize these recommendations, the report calls for creation of an interagency ‘Energy Retrofit Working Group,’ chaired by the Department of Energy, HUD, the Department of Agriculture, the Department of Labor, and the Environmental Protection Agency.

Is the White House doing more than tapping its shoes together to bring the initiative home? Monitor these two sites for progress:http://www.whitehouse.gov/strongmiddleclass/blog

http://www.whitehouse.gov/strongmiddleclass

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

Energy research and the cobbler’s children

By Elisa Wood

November 5, 2009

Scientific research has brought us products that offer greater energy efficiency. But is research, itself, energy efficient?

Evan Mills, staff scientist with the Lawrence Berkeley National Laboratory, raises this question and points out what may be a largely untapped market for energy efficiency companies: research labs. (See Environmental Science & Technology, http://eetd.lbl.gov/emills/pubs/pdf/sustainable-scientists.pdf.)

US researchers “unwittingly” spend about $10 billion annually on energy, he says in the article, and could cut the bill by half through sustainable practices.

It’s important to take a look at research efficiency because labs are often energy intensive. Researchers may work in hyper clean environments with sophisticated air ventilation, or they may need data centers with vast air-conditioning. Thus, a lab’s utility bills can be “staggering,” he says. Consider CERN, the European Organization for Nuclear Research, whose 230-MW capacity needs costs $80 million per year; or the US Department of Energy’s data centers, which pay $100 million per year for energy.

Money saved through efficiency could be channeled into more research. Yet only 1 to 3% of research labs operate in “green” facilities. LBNL has created a model energy efficient lab setting at its Molecular Foundry, a nanotechnology lab in Berkeley, California. With LEED gold certification, the facility has achieved energy savings 28% beyond California’s already aggressive building standard. http://www.kawneer.com/kawneer/north_america/en/news/releases/LBNL_Release_FINAL.pdf

Typically, laboratory’s can find energy savings by using premium-efficiency fume hoods and laboratory equipment, avoiding over-ventilation, limiting pressure drop in the ventilation system, engaging in energy recovery, minimizing simultaneous heating and cooling, and properly sizing space conditioning equipment to match energy needs, according to Mills.

He recommends that we reduce energy costs by including efficiency requirements in research solicitations. Labs could then calculate the cost of efficient equipment or building improvements into a proposal’s capital expenditures.

“Doing the right thing isn’t the only reason to strive for improved sustainability,” Mills says in the article. “The scientific enterprise depends on availability of ample energy and can be fettered by its cost. In the 1980s, LBNL’s particle accelerators were responsible for the vast majority of site-wide energy use. Indeed, the Bevatron’s [a particle accelerator] energy budget only allowed for ten months of experiments each year. At the time, raising the energy efficiency of the process (e.g., through improved magnets and power supplies) trimmed consumption and costs sufficiently to enable a full year of experiments to be conducted.”

Today, it appears energy research has succumbed to the syndrome of the cobbler’s children who have no shoes. Science discovers efficiencies, but doesn’t necessarily put them to use for its own purposes. Given our growing mastery of common efficiency practices in homes and businesses, research labs represent a new frontier for the energy efficiency industry.

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

What’s geothermal again?

October 29, 2009

By Elisa Wood

Some green energy sources seem to have charisma; others struggle for public attention with little success.

Solar energy is an “it” technology, as evidenced once again by the tremendous participation in the annual Solar Power International conference in Anaheim, California this week (Oct. 27-29). Twice as many companies (945) are displaying their wares in the Expo Hall this year, despite the still lagging economy. And overall attendance is expected to break last year’s record, itself a record breaker.

Even on Main Street, ask pretty much anyone and they know solar, probably like it, and see it as an economy builder.

Ask the same people about geothermal heat pumps and there is a good chance they won’t know what you’re talking about. Or they may give an answer that confuses the appliances with geothermal geyser power plants. For whatever reason, the concept of extracting heat from the ground has yet to capture the public or political imagination as much as extracting it from the sun.

Yet, geothermal heat pumps could have a significant impact on our energy supply. They can be installed pretty much anywhere there is a building. And if we used them to maximum potential in the United States, we could avoid building 91-105 gigawatts of generation, nearly half of the new power we will need in 2030, according to the US Department of Energy.

Homeowners who consider then discard the idea often cite the high upfront installation costs. Yet the same argument could easily be made about solar photovoltaic panels. So why is geothermal an also ran technology?

One problem, according to the DOE, is that the heat pump industry needs to collect and disseminate more solid data on heat pumps. Work underway by the Chewonki Foundation, an educational institute in Maine, moves in this direction. With a grant from the Maine Public Utilities Commission, Chewonki is monitoring and measuring the performance of a newly installed heat pump system at its 11,000 square-foot meeting hall. The state is looking for an alternative to heating buildings with oil, a relatively common fuel in Maine. Geothermal heat pumps may prove to be that alternative. http://www.onsetcomp.com/resources/white_papers

This is not to imply that the geothermal heat pump industry is not growing. To the contrary, US shipments of geothermal heat pumps grew 40 percent last year, according to a report released this month by the Energy Information Administration.http://www.eia.doe.gov/cneaf/solar.renewables/page/ghpsurvey/geothermalrpt.pdf. The industry is very much a domestic jobs builder. Most of the systems shipped in the US last year where manufactured here — 416,019 tons – with the remaining 86 tons from China. Sixteen percent of US product was exported.

Still, the geothermal heat pump industry is a small one, representing $319 million last year. Compare this to a domestic solar PV cell and module market of $1.72 billion in 2007 (2008 figures are not yet available from EIA).

Of course, it was just a few years ago that solar conferences were drawing hundreds, not tens of thousands of people, as Solar Power International does now. So who knows? Perhaps it’s not far-fetched to imagine the term” geothermal” rolling off the tongue of the average consumer, as easily as “solar” does today.

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

It’s the environment, stupid

By Elisa Wood

October 22, 2009

If Harry Truman were running for president today, he’d probably ‘Give ‘em Green,’ rather than ‘Give ‘em Hell.’ Bill Clinton’s campaign slogan would be, ‘It’s the environment, stupid.’ And Herbert Hoover might be promising a solar panel on every roof, rather than a chicken in every pot – and the pot would sit on a smart-metered stove, powered by a plug-in hybrid, eligible for renewable energy certificates.

Today, green credentials count. Hardly a day goes by without a mayor, governor or legislator claiming some sort of first, best or highest green energy goal.

That’s why the state energy efficiency scorecard, released this week by the American Council for an Energy Efficient Economy, is significant. It carries political currency.

Bragging rights go to California, Massachusetts, Connecticut, Oregon and New York,* the top five states (in that order) doing good by energy efficiency. Some red faces, however, might be found in Nebraska, Alabama, Mississippi, North Dakota, and Wyoming, the group that ACEEE says “most needs to improve.”

States are expected to continue their pursuit of energy efficiency into the next decade. The ACEEE reports that utility ratepayer-funds for efficiency will likely grow from $3.1 billion in 2008 to $5.4-$12 billion in 2020.

What’s most interesting is that so much money and effort is being put into energy efficiency now – during the Great Recession – when states face deficits. This defies conventional behavior: Historically, Americans worry about the environment only when the economy is sound. It appears that green energy advocates have successfully imprinted in the American psyche a link between renewable energy and efficiency and economic prosperity.

“This growing and deepening commitment to energy efficiency is so strong that the current recession has not put a dent in the vast majority of state programs,” says Steven Nadel, ACEEE executive director. “And that is for good reason: Energy efficiency is the only resource that can actually reduce energy consumption while growing the economy — making efficiency the ‘first fuel’ states can use to balance their energy portfolios.”

So we find ourselves in a kinder, greener nation, one with no electric meter left behind, where we walk softly and carry a big wind tower…

*At about the same time the ACEEE released the report, New York announced plans to shift Regional Greenhouse Gas Initiative money, slated for clean energy programs, toward reducing its deficit. This may have reduced New York’s ranking in the eyes of the environmental community.

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

Efficiency left out of cap and trade

By Elisa Wood

October 15, 2009

Waxman/Markey’s climate change bill is about 1,400 pages. Its length and complexity, alone, provides fuel for its opponents. Would it stand a better chance of enactment if it encompassed less?

For example, would it have been wiser if Congress pursued cap and trade one year and a renewable energy standard another? I’ve asked this question a lot during interviews the past few weeks, and received a range of responses. But what I found most enlightening, at least from an energy efficiency perspective, was a webinar offered by Bill Prindle, vice president at ICF International. http://www.icfi.com/markets/energy/webinar/webinar-archive.asp.

Here’s what I took away: Energy efficiency helps the carbon reduction cause. But the carbon reduction cause doesn’t do much for efficiency.

Most versions of cap and trade programs now on the table do not recognize the value of demand-side resources in reducing emissions. Credit goes to emissions reductions at the power plant level, not at the retail customer level. So while my new, efficient heat pump will cut my energy use and therefore carbon emissions, this action is not acknowledged anywhere in a cap and trade system. Cap and trade offers no financial reward to the consumer or business that invests in energy efficiency measures.

In a perfect world, lawmakers would rethink cap and trade to encompass demand-side efficiency. But it appears that political and technical obstructions make that difficult. This is bad news – and downright odd – given that energy efficiency is widely acknowledged to be the cheapest way to cut carbon dioxide emissions.

So what’s to be done?

Prindle describes the need to enact polices that complement cap and trade. This is where a national renewable energy standard comes into play. Within Waxman/Markey, the standard requires not only a certain percentage of renewables in a state’s energy mix, but also certain amount of efficiency – a so-called energy efficiency portfolio standard. With a standard in place, efficiency increases, energy use declines, and fewer greenhouse gases are emitted – without any cap and trade influence. As is often the case, the states have already jumped out in front of federal policy: 19 now have such energy efficiency portfolio standards.

A bill with just a cap and trade scheme, one without a portfolio standard, eliminates a powerful way to reduce carbon emissions. So perhaps the 1,400 pages of Waxman/Market are justified. The verdict, of course, is out on whether or not Congress will pass an energy bill this year. Much has been made of the complexity and length of health care reform legislation. Expect the same when, and if, the energy bill comes under public scrutiny. We’ll see what pages make it beyond the cutting room floor.

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

Energy head tilters for this week

By Elisa Wood

October 8, 2009

I’ve been writing about energy for 20 years. And during those years, I’ve heard many out-of-the box concepts and witnessed some surprising trends. But it seems that lately head-tilting news comes along more and more frequently, a sign I think of how quickly innovation is occurring in the electric power industry.

Below are three ideas that caught my attention this week as I covered the industry. Perhaps you have your own head-tilters to add. Please do!

By the way, two decades ago solar and wind power were pretty much oddball ideas. Consider that before judging any comments.

• A 14-year-old boy in an impoverished African village, who has never heard of the Internet, built a working windmill out of scrap material

Too poor to attend school anymore William Kamkwamba went to a US-sponsored library to try to keep up on his learning. There the Malawian boy found diagrams for building windmills and painstakingly followed the directions to bring electricity and water to his famine-stricken village. He scavenged for junk and found old bike parts, pipes and fans to make it work. His fellow villagers thought he was crazy until he succeeded. His story is chronicled in his book, “The Boy Who Harnessed the Wind.” http://williamkamkwamba.typepad.com/

There is some irony here that an attempt has been underway for 10 years to build offshore wind power on wealthy Cape Cod, with no luck. Maybe the region needs to hire Kamkwamba as a consultant.

• Baby you can drive my combined heat and power car

We’ve all heard that combined heat and power is a highly efficient approach to heating, cooling and electrifying schools, stores, office buildings, factories, hospitals, and multi-famly housing complexes. But cars? Thomas Blakeslee, president of the Clearlight Foundation, posits that we could achieve far greater fuel efficiency if, rather than feeding ethanol directly into cars, we used it to fuel combined heat and power plants that would in turn electrify cars. The efficiency would be so great, we could drive these electric cars 22 times farther on CHP electricity than if we used the same acre of corn to make ethanol. http://www.clrlight.org/CHPethanol.htm

• Energy efficiency: The invisible hand that Adam Smith never saw

Energy efficiency is often discussed in terms of how much money it can save a household or business on utility bills. But how about what it can save an economy? Environment Northeast issued an interesting report in September that investigates what efficiency can do for state gross product. The macroeconomic report found that every $1 million invested by a state in energy efficiency increases gross state product by $7 million. http://environmentnortheast.org/

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

Is small business left out of the EE boom?

By Elisa Wood

October 1, 2009

The US has about 29.6 million small businesses and they employ over half of the nation’s private sector. They hire 40% of our high tech workers, make up 97.3% of our exporters, and generate most of our innovations, according to SCORE. http://www.score.org/small_biz_stats.html

Still, we hear small business often say it gets the shaft when it comes to public policy; it just doesn’t have the political clout of big business.

What’s this got to do with energy efficiency? I’ve been wondering – suspecting actually – that small business is getting left out of the energy efficiency boom sweeping the United States.

I admit that my evidence is purely empirical and cursory. I have been trying to collect case studies from the Eastern states for an energy efficiency guide that I am collaborating on with my colleagues at RealEnergyWriters.com. I’ve put out a request for the case studies from small businesses to my many good sources, as well as through the social media.

I’ve received profiles of schools, colleges, hospitals, and manufacturing facilities – all non-profits or large energy users. Where I wonder is the dry cleaner, the Mom & Pop shop, the car wash?

I don’t mean to imply there are no small business efficiency programs. Several people have directed me to Efficiency Maine’s program, which does not target small businesses per se, but does serve many. I’ve also received some great examples from United Illuminating in Connecticut.

Manufacturers and data centers are low-hanging fruit that energy service companies like to pursue. Homeowners have consumer groups pressing state regulators on their behalf. But who is pushing before state utility commission’s to be sure small business gets its fair share of the vast amount of efficiency funding now being distributed?

Perhaps the fault lies with small business, itself. Overwhelmed by trying to operate in this economy, do small business owners have the time to think about energy efficiency? It’s likely few even realize funds and financing mechanisms exist in several states to help them with upfront capital costs.

Small business may well fall victim to some of the market failures Environment Northeast points out in its October 1 report, “Energy Efficiency: Engine of Economic Growth.” http://www.env-ne.org/

These failures are:

* Liquidity Constraints – when a consumer or business has inadequate access to capital to purchase efficient equipment or improve building energy performance

* Split Incentives – when the owner of a piece of equipment or building (the landlord) does not pay the energy bill and is thus unlikely to invest in efficiency improvements that would benefit the resident/renter

* Information Problems – when purchasers do not know the future energy costs of a product or property and are thus unlikely to invest in the more efficient option with a higher upfront cost

* Behavioral Problems, such as bounded rationality – when the complexity of a decision is beyond the ability of a consumer to make an economically optimal choice.

So this blog does not really reach a conclusion, but asks a question: Are small businesses getting left out of the energy efficiency boom? If so, what’s the problem? If not, please direct me to success stories!

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

Efficiency is cheap, but will it sell?

By Elisa Wood

September 24, 2009

Expect to see this number a lot in energy discussions over the next few years: 2.5 cents/kWh. It is the average cost of energy efficiency, a figure pegged this week in a new report by the American Council for an Energy Efficient Economy. http://www.aceee.org/press/u092pr.htm.

This number is big news because it is so small. As a resource, energy efficiency beats out all conventional power sources on price. (See chart below.) Moreover, it’s a price that has been dropping. Five years ago energy efficiency cost 3 cents/kWh.

But just because something is cheap, doesn’t mean people will buy it. How much energy efficiency will make it into the nation’s energy shopping cart?

Efficiency boomed in the early 1990s, but then busted later in the decade when deregulation allowed many utilities to shed their efficiency programs. It is resurging now, part of push by state and federal policy makers to green and ‘smarten’ energy supply.

Most utilities do not make money on efficiency, and this is part of the reason it busted in the late 1990s. Perhaps as important, efficiency’s branding was off. It was seen as an extra, a nicety to pursue out of goodwill when a utility or state had some extra money.

ACEEE and other efficiency advocates are trying to reshape the image. They refer to efficiency as a fuel – just like wind, sun, coal, natural gas, oil. And they want efficiency to be the ‘first fuel.’ This means that when a utility is planning its energy supply, it first applies as much efficiency as is cost effective and plausible, before it builds more expensive new power. Some eastern states are already using this planning concept. In addition, many states have set specific energy efficiency goals, some very aggressive.

That is why ACEEE’s 2.5 cents/kWh becomes so important. It is a kind of marker against which other resources will find themselves competing more and more in policy planning.

Meanwhile, an increasing number of states are decoupling utility profits from kilowatthour sales or instituting other financial incentives that inspire utility support for efficiency.

Of course, our economy cannot prosper on efficiency alone, but many studies indicate we still have a lot of waste in the system. So as an energy planner, if you were confronted with increased demand – and are not dealing with policy or system issues that require generation or transmission as a solution – which of these would you pursue first?

Resource	Cost
Energy Efficiency	1.6 cents/kWh to 3.3 cents/kWh
Pulverized coal	7 cents/kWh to 14 cents/kWh
Combined cycle natural gas	7 cents/kWh to 10 cents/kWh
Wind energy	4 cents/kWh to 9 cents/kWh

Credit: Cost figures from ACEEE, “Saving Energy Cost Effectively: A National Review of the Cost of Energy Saved through Utility Sector Energy Efficiency Programs,” September 2009, http://www.aceee.org/press/u092pr.htm.

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

Now where did I put that energy efficiency?

By Elisa Wood

September 17, 2009

Sort of like my car keys, “the forgotten memory doesn’t disappear – we just can’t remember where we put it.” So says Jonah Lehrer, one of my favorite bloggers and contributing editor at Wired.

What’s memory got to do with electric power? It appears we keep misplacing energy efficiency. When critics – even sometimes supporters – talk about reducing greenhouse gases, they forget to calculate whether or not energy efficiency can lower the price tag.

Could it be, then, that carbon dioxide reductions will cost society less than we forecast?

The American Council for an Energy Efficient Economy contends that is the case. “Much of the debate on federal cap and trade legislation is focusing on the cost of compliance. Prior studies either do not account for energy efficiency provisions in the legislation, or due to a shortage of time and other resources, address only a few of the energy efficiency provisions,” says ACEEE in a new report, "Energy Efficiency in the American Clean Energy and Security Act of 2009: Impacts of Current Provisions and Opportunities to Enhance the Legislation."

The findings run contrary to conventional thinking about climate change costs. The climate bill passed by the US House in June won’t cost us money; it will save us money, according to ACEEE.

The legislation would require that 20% of our energy supply come from green energy — 8% of the 20% can come specifically from energy efficiency. It also ramps up buildings codes and appliance standards, and takes other action to decrease energy use.

These efficiency measures would save the average household $220 by 2020 and $486 by 2030 – more than cap and trade costs.

Even more savings are to be had – as much as $832 per household by 2030 — if the Senate makes some changes in the bill, according to ACEEE. Specifically, the organization says Congress should:

• Mandate that 10% of our energy come from efficiency
• Direct one-third of electric utility allowances to energy efficiency
• Extend to 2030 the 9.5% allowance revenue allotted to state energy and environmental development funds.

Exactly how much energy would we save? If the Senate makes these changes to the bill, we’ll save as much energy by 2030 as US households now consume in a year, says ACEEE. The energy savings are equivalent to what 512 power plants produce at their peak production. A big number, a kind of elephant in the room, one would think. But we’ll see if it gets lost as Congress works on climate change in the coming months.

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

Are you eligible for a manufacturing tax credit?

By Elisa Wood

September 10, 2009

The United States has been generous with tax credits for energy production. But until now, it’s been somewhat miserly about giving breaks to those who make the equipment that makes the energy – or saves it.

That’s changed with creation of the Advanced Energy Manufacturing Credit (MTC), part of the federal stimulus package. The 30% tax credit makes $2.3 billion available for new, expanded, or re-equipped domestic manufacturing facilities that produce clean energy equipment.

But with the deadline for applications right around the corner – September 16 – manufacturers are perplexed by eligibility requirements and wondering if they qualify.

Bridget Hust, partner with the law firm Faegre & Benson, who has been pouring over the rules on behalf of clients, says application requirements are “all over the map.” She suggests that if you think you might be eligible, then apply. It may not be clear exactly who will qualify until mid-January when the Internal Revenue Service accepts or rejects applications. And even those that are rejected may have a shot at revising and resubmitting their proposals, she said. The Feds plan to keep giving out money until the $2.3 billion is exhausted.

The credit seems particularly wide open for technologies that reduce carbon dioxide emissions – even the more obscure approaches. Hust says she is particularly eager to see how the tax credit affects manufacturing of advanced transmission, smart grid and energy storage products, since they may be key to integrating more wind power into the system.

The DOE says the credit is available for:

• Technologies that create energy from renewable resources (sun, wind, geothermal and other renewable resources)
• Energy storage technologies (fuel cells, microturbines or other energy storage systems used in electric vehicles)
• Advanced transmission technologies that support renewable generation (including storage)
• Renewable fuel refining or blending technologies
• Energy conservation technologies (advanced lighting, smart grid)
• Plug-in electric vehicles & vehicle components (motors, generators)
• Property to capture and sequester carbon dioxide
• Other property designed to reduce greenhouse gas emissions

The manufacturer may not need the credit, particularly in a down economy where many lack taxable income. But like the solar and wind production tax credits, it could draw third-party investors in need of a tax break who will partner with the manufacturer.

See Hust’s white paper for more details http://www.faegre.com/showarticle.aspx?Show=10112, or go to http://www.energy.gov/recovery/48C.htm

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

Energy sprawl: The next worry?

By Elisa Wood

September 3, 2009

Energy facilities take up space. Some, like wind farms, take up a lot of space. In fact, new energy production will consume more land than can be found in all of Nebraska by 2030, according to a recent report by The Nature Conservancy.

This will create what the report describes as “energy sprawl,” a term I’m guessing we will start to see more in the legal briefs by NIMBYists. It’s a flashpoint phrase. Americans don’t like sprawl of any kind — although we appreciate the convenience it affords. Nice that the super store is only five minutes away; not so nice to give up the paradise that became the parking lot.

Unfortunately, cleaner energy often means greater energy sprawl, the report says. The more aggressively we pursue greenhouse gas reduction, the more acreage we are likely to use. Biofuels, in particular, gobble up a lot of land because they use farm crops.

The report is not suggesting we give up on green energy. On the contrary, it appears to be more a matter of choosing energy sites with care. Chief among the report’s recommendations is pursuit of more energy efficiency. Of all energy choices, efficiency has the lowest impact on land use. For every terawatt hour of electricity use avoided, we avoid sacrificing 4.7 to 17.8 square miles, says the report.

After efficiency, the next three best ways to achieve emissions reductions, but limit energy sprawl, are to:

*Build power plants on brownfield sites as much as possible

*Create flexible cap and trade rules, which allow for emissions reductions with certain low-land impact technologies, such as nuclear power.

*Site plants carefully, in areas where they have minimum impact on habitat

The report also suggests that we make energy sprawl a new metric in energy policy, another issue to weigh when debating which resources to build. Is this a good idea? I’d be interested in hearing what readers think. On the one hand, clearly it’s important to protect habitat. On the other hand, siting power plants already is difficult. And if we don’t produce enough electricity, the consequences are serious. Power shortages drive up prices, undermine our economy and disrupt our well-being.

I’m looking forward to hearing your thoughts. And I’m guessing they may depend, at least in part, on how close you live to that piece of ‘Nebraska’ likely to disappear.

See the full report at http://www.plosone.org/article/info:doi/10.1371/journal.pone.0006802

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

What the heck is a smart grid anyway?

By Elisa Wood

August 27, 2009

You know the old adage, ‘Never talk about politics or religion in polite company’? I’m beginning to think we need to add a third restraint, one against debate over the meaning of smart grid.

Okay, it’s not exactly a dinnertime topic. But I’ve discovered in gatherings of energy nerds (I’m one), discussion can become fairly heated over what constitutes “smart grid.”

On the one side are the engineering purists who stick to what I believe was an early definition: automated two-way communication on the grid by way of digital technology. At some point this came to widely include a smart meter that lets your utility ‘talk’ to your house and your house talk back.

On the other extreme, are those that seem to use the term to describe any grid innovation, particularly green or energy efficient technologies. It doesn’t even have to be a new technology. Combined heat and power is sometimes included in the smart club and it is more than 100 years old. (But then, just because something is old, doesn’t mean it’s not smart.)

Sometimes solar panels are described as smart. (They become stupid on the rare occasion when they leak.) And demand response, probably rightly so, has secured its position as part of the wired Mensa club. Integrating wind energy into the transmission system is often cited as a reason we need a smart grid.

It seems important that the industry stop fumbling with this definition. As Jesse Berst said in an excellent article, published March 5, 2009, SmartGridNews.com: “Can you imagine if an automobile CEO began his bailout plea with “I don’t really know what an automobile is, but can I have $20 billion please?” Or if the CEO of CitiGroup began a speech with: “I don’t really know what a bank is, but…” http://www.smartgridnews.com/artman/publish/commentary/Why_the_Smart_Grid_Industry_Can_t_Talk_the_Talk_and_What_to_Do_About_It-530.html.

Here are a few definitions of smart grid that show the range of thinking. Please let me know what you think and post yours as well. Virtual table pounding acceptable; no name calling please!

*“A smart grid delivers electricity from suppliers to consumers using digital technology to save energy, reduce cost and increase reliability and transparency.” Wikipedia

*“In terms of transmission, a smart grid makes it easier to deliver alternative energy sources like wind and solar from rural installations to city centers.” Ariel Schwartz, http://www.inhabitat.com/2009/04/30/energy-101-what-is-a-smart-grid/

*“Smart grid is a transformation. Just as the Internet revolutionized communication; the smart grid will transform how we produce energy, how we transport energy, how we store energy and how we use energy.” GridWise Alliance

*“The Smart Grid isn’t a thing but rather a vision and to be complete, that vision must be expressed from various perspectives – its values, its characteristics, and the milestones for achieving it.” Joe Miller http://www.smartgridnews.com/artman/publish/commentary/What_Is_the_Smart_Grid-567.html

*“Smart grid is the new big thing in the world of green…” http://www.treehugger.com/files/2009/07/amsterdam-smart-grid-pilot-project-ibm-cisco.php

*“While many conversations about the Smart Grid center on communications and metering technologies, the actual definition of Smart Grid is much broader and encompasses grid infrastructure — the brawn as well as the brains.” American Superconductor.

*“Over the past twelve months, Smart Grid has matured from a marketing buzzword to an industry strategy, with everyone from electric utility providers, to consulting and solution firms, to our country’s executive and legislative leaders referencing it as a key strategy for any number of objectives. Experts seem to agree that the Smart Grid is past the tipping point; however, agreement on strategy doesn’t necessarily constitute an agreement on deployment tactics.” http://www.smartgridroadshow.com/2/

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

Smart grid and stupid buildings: Can this marriage survive?

By Elisa Wood 

August 20, 2009 

Smart grid is still in its honeymoon phase. Hardly a day goes by without fanfare in the news about how it will reform building energy use. Maybe so. But for the marriage of smart grid and US buildings to work, someone’s got to change. Is the stupid building up to the task? 

“Wiring the Smart Grid for Energy Efficiency,” a white paper by Oregon-based Portland Energy Conservation Inc (PECI), brings us down to earth by pointing out how much transformation is required.  

First, the bill. Smart meters alone will cost about $35 billion to install in 140 million U.S. homes and small businesses. Estimates are that nationwide, we’ll need to spend $400 billion to $900 billion to create a truly smart grid. Sure, forecasts Indicate smart grid will more than pay for itself. But where does the upfront capital come from? 

Second, many of our buildings wouldn’t know what to do with a smart meter. Their control systems are not up to the task. This could spell trouble if the systems are not improved before smart devices are installed. “Imagine if a building was called upon to reduce load, and while all the controls were in place to raise the temperature setpoint throughout the building to 76°F, this action results in four offices overheating to 83°F due to the need for air distribution system maintenance and sensor calibration,” the PECI paper says. 

Third, how do we achieve “true interoperability of communications,” or rather, get the smart grid and stupid building to talk? This will require development of a common language, still in the works. “In residential applications, grid-aware appliances will become widespread only if they are easy to install. For example, a washing machine that receives a price signal from the electric grid and correspondingly makes decisions about whether to operate should be able to be installed by a homeowner or by a contractor without expensive set-up costs. This kind of plug-and-play operation requires that the appliance automatically operates with the utility’s communications network as well as any home energy monitoring system.” 

Automation will be crucial. Or at the least, data display must be understandable and compelling. The report points out that consumers already suffer from information overload, so are unlikely to take the time to respond to price signals without strong incentive. Worse, consumers might treat energy savings like “a fad diet rather than a lifestyle change,” making it difficult for our society to achieve lasting energy savings.

We’ve yet to come up with the “killer application” to make smart grid a mass-market product, like what email did for the Internet. Further, we’re entering this new terrain with a lack of experienced building performance engineers.

The report does not say smart grid won’t live up to its promise of achieving dramatic energy savings. Quite the contrary. Smart grid may be one of the most brilliant ideas of our time. But we must proceed soberly.

The white paper is available athttp://peci.org/About/smartgrid_whitepaper_final_071709.pdf.

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

Is waste heat the silver bullet?

By Elisa Wood

August 13, 2009

The energy industry tends to get stuck on certain words. Silver bullet is one of them. Insiders and policymakers often like to say there is no silver bullet to fix US energy woes. We need a portfolio of solutions – renewables, efficiency, smart grid, transmission expansion, coal sequestration, etc.

That may be true, but Tom Casten begs to differ. Casten is a bit of a rock star in the field of decentralized power. He has more than 30 years in the business and leadership positions in key organizations. It’s not unusual to see him quoted on energy not only in the trade press, but also in magazines like Forbes. So folks looking at alternatives tend to listen to him.

“I think there is a silver bullet, and I think it is all about the way the world makes power,” he said at the International District Energy Association conference in June. (Listen to his presentation at www.districtenergy.org.)

Or rather, it’s about the way the world wastes energy.

“Generation inefficiency is the elephant in the room. Nobody talks about. We put all kinds of policies into doing other things and ignoring that because most of industry makes money on this inefficiency,” he said.

The inefficiency he describes is the waste heat that power plants emit. It accounts for about two-thirds of plant fuel use, and it ends up floating into the sky unused. Weirdly, we know how to solve this problem, we have for decades – through combined heat and power plant. These plants marshal the waste heat and pipe it, so that it can be used for other purposes, such as steam energy for a college campus or an industrial process.

We use combined heat and power to generate only about 80,000 MW, about 9 percent of US total electric capacity. Of course, combined heat and power doesn’t make sense in all circumstances. But an Oak Ridge National Laboratory study released in December says the US could increase combined heat and power to 20% of capacity. Some Europeans countries have achieved this level –and they lack the large number of factories found in the US that can use the waste heat.

ORNL says it would take some regulatory tweaking to move the market to 20%. But one thing is for certain, there is no lack of interest in combined heat and power these days. The US Department of Energy recently offered $156 million in grant money for combined heat and power projects. By the time bids closed in mid-July, the DOE had received 359 applications for projects totaling $9.4 billion, according to Rob Thornton, IDEA president. “We knew it was going to be oversubscribed, but we never envisioned it being a 25 to 1 ratio,” he said.

Whether waste energy will emerge as the silver bullet remains to be seen, but clearly there is no longer a shortage of those aiming this bullet toward its target, the elusive werewolf of inefficient energy.

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

Carbon cap and boom?

By Elisa Wood

August 6, 2009

If we try to reduce greenhouse gases, the economy will take a hit, according to conventional wisdom. The Energy Information Administration bolstered the notion this week by reporting that energy prices would rise for the average US family by $142 in 2020 and $583 in 2030 under the House cap and trade bill passed in late June.

Steven Chu, US energy secretary, tried to soften the blow by saying that the carbon invoice amounted to less than a postage stamp per day. But cash-strapped US households are counting their postage stamps these days and finding they have none to spare.

So if cap and trade truly increases costs, it may be a tough sell to the American public when taken up by the Senate in September. But must we take an economic hit to revamp our energy supply?

The American Council for an Energy Efficient Economy offers an interesting twist on the conventional thinking about the cost of carbon reduction. If we do it right, we could actually better the economy, the organization says in its report, “The Positive Economics of Climate Change Policies: What the Historical Evidence Can Tell US,’ by John “Skip” Laitner, an ACEEE senior economist.

Laitner provides some interesting historic detail to underscore the argument that energy efficiency can reduce greenhouse gases without breaking the bank. Efficiency is not only relatively cheap, but it also creates a more productive economy. Consider this: The US has expanded its output threefold since 1970 and doubled its per capita income, yet the nation only increased its demand for power by 50% because of energy efficiency.

To give perspective on what this means, Laitner converted our energy use into equivalent gallons of gasoline. Today we use the energy equivalent of 2,600 gallon of gasoline per resident; had we not imposed greater efficiency, we would be using the equivalent of 5,500 gallons per person.

So, we have reduced our “energy intensity,” the amount of energy it takes to support a dollar of economic activity. “This decoupling of economic growth and energy consumption is a function of increased energy productivity: in effect, the ability to generate greater economic output, but to do so with less energy,” the report says.

Analysts tend to over-estimate the cost of carbon reductions by underestimating the economic benefits of energy efficiency. For example, energy efficiency not only reduces energy bills, but also often leads to cuts in other costs to homes, buildings and factories. Maintenance, water use, chemical use all tend to decline.

“Changing our investment mix away from traditional, energy intensive patterns toward one that emphasizes more productive technology and behavior, greater energy efficiency, and more labor intensive activities can yield higher rates of economic growth and lower economic and environmental costs,” says the report. “In many ways this is much like rebalancing of a retirement portfolio to take advantage of changing market conditions and new growth opportunities.”

We managed to accomplish a high level of efficiency over the last 40 years with no particular plan. In fact, we proceeded in a “haphazard” and sometimes “counterproductive” way, says the report. What kind of energy productivity could we achieve if we actually tried? Might our energy secretary 40 years from now be talking not about what the new energy economy cost, but what it saved American households?

The report is available at: http://www.aceee.org/.

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

Smart grid: How big is big?

By Elisa Wood

July 23, 2009

A Cisco executive attracted some eye rolling after commenting that smart grid could be “even bigger than the Internet.”http://www.cisco.com/web/strategy/energy/smart_grid_solutions.html

But the statement isn’t farfetched when you think about what smart grid encompasses: a convergence of three industry giants: information technology, telecommunications and the electric grid, the world’s biggest machine.

A report this week by Greentech Media made clear just how large an empire this triumvirate can create — and what it will mean to our society if it succeeds and if it fails.

The smart grid – which will cost an estimated $165 billion to build – may constitute the largest single information technology investment to reduce carbon dioxide emissions, according to “The Smart Grid in 2010: Market Segments, Applications and Industry Players” by David Leeds. http://www.greentechmedia.com/

It also represents one of the biggest business opportunities of the century, says the report. How big is big? “When you consider that the U.S. electric utility sector, with its annual revenues of roughly $300 billion, is 30% larger than the automobile industry and twice as large as the telecommunications industry, and then bring to mind the craze of dotcom investments and telecom merger & acquisition which occurred in the mid to late 1990s, a reasonable picture starts to emerge of what can be expected of in terms of smart grid investments and M&A in the next five to 10 years,” says the report.

Keep an eye on demand response because it’s likely the first smart grid “killer ap” to capture market penetration, even before smart meters, says Greentech Media. “The demand response market is now being referred to as a gold mine and industry analysts have called for this market to quadruple over the next five years,” says the report. The successful public offerings of demand response leaders, Comverge and EnerNoc, underscore the market’s maturity, according to the report. But what if society loses interest in smart grid? (It would not be the first time we’ve abandoned promising energy innovations.)

Without smart grid, forget about green energy, says the report. Renewables “will remain niche,” “a non-starter.” We need the smart grid to facilitate and integrate renewable energy because of its variable nature. After all, solar, wind and electric cars are nothing new. Photovoltaics have been around since the 1950s and wind and electric cars since the turn of the century. Smart grid offers to take them from “novelty to norm,” says the report. Green energy is “battle ready;” what it needs is smart grid infrastructure to support its introduction on a mass scale.

For all of smart grid’s benefits, it still faces uncertainty: If we build it will they come? Smart grid is premised on the idea that if consumers receive real-time information about their electricity usage, they will consume power more judiciously. That requires “re-imagining and re-engineering” our relationship with energy. “Changing North American consumption habits, especially those related to energy, which historically has been “dirt cheap,” cannot be assumed to be an easy assignment,” Greentech Media warns.

So whether the smart grid becomes an enormous business opportunity or an enormous bust may rest largely with human mindset. The question becomes not, how big is smart grid, but how big will we allow it to be.

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

Light-bulb Liars II: Mercury and CFLs

By Elisa Wood

July 16, 2009

The Washington Times ran a commentary July 11 that took a swipe at compact fluorescent lights. Titled “Light-bulb liars,” the article warns that broken CFLs are an “environment disaster in your family room” that “could poison the dog, the kid and the wall-to-wall rug.”

To underscore the gravity of CFL dangers, the article then takes us through the Environmental Protection Agency’s step-by-step mercury clean-up advice. http://www.washingtontimes.com/news/2009/jul/11/light-bulb-liars/?feat=article_top10_read&page=2

Here are a few things the article fails to say about CFLs, that enerystar.gov points out.

*True, they contain mercury, but a very small amount. They average 4 milligrams, compared with 500 milligrams in the old mercury-based thermometers, an amount equal to 125 CFLs.

*Advancements in CFL technology are reducing their mercury content. Some have mercury content as low as 1.4 to 2.5 milligrams.

*Coal-fired electric plants create a heck of a lot more mercury. CFLs are more efficient than conventional light-bulbs. So when we use CFLs we use less electricity, meaning grid operators and utilities can fire up coal-fired generators less frequently. If all of the CFLS sold in 2007 ended up in a landfill, they would deposit 0.16 metric tons of mercury. In contrast, coal plants emit 104 metric tons of mercury annually.

The article also points out that CFLs are more expensive than conventional incandescent lights, but fails to say that they continue to operate far longer.

After I finished reading the Washington Times commentary, my eyes went back up to the title: “Light-bulb Liars.” Now the Times wasn’t referring to itself, was it? Okay, to say the paper lied might be a little harsh, but the article certainly engaged in hyperbole and sins of omission.

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

Using electricity to save the planet

By Elisa Wood

July 9, 2009

When it comes to energy efficiency, it used to be the big guys that mattered. Policymakers and market leaders focused on manufacturers, refiners and others that gobbled up lots of kilowatt hours.

It’s not surprising. Manufacturers create bang for the buck. Better motors, refrigeration or combined heat and power can lead to six-digit dollar savings — far more impressive than the $10 per month an aggressive household effort might generate.

An energy attorney once told me an interesting story in this regard. He asked his family to turn down the thermostat to save money; they said they would rather just skip ordering pizza once a month.

Household efficiency often doesn’t seem worth the effort. But a shift is occurring; efficiency efforts are increasingly focused on the residential sector.

In fact, a study released this week by the Electric Power Research Institute shows that homes, in aggregate, offer greater technical potential for energy savings and reductions in carbon dioxide emissions than stores or factories. And it does not require use of refrigerators that talk to the grid, glowing energy orbs, or other cutting edge technologies to significantly reduce emissions. Instead the report finds carbon reductions in switching out common home devices that use fossil fuels with those that use electricity.

EPRI looked at household activities that use energy: clothes drying, heating, cooling, cooking, warming pools. It then found electric technologies that allow us to perform these activities with less fossil fuel use; a heat pump for example might replace a natural gas furnace.

What electric devices did the best job replacing fossil fuel? EPRI’s short list for households includes heat pump clothes dryers, heat pump pool heaters, air source heat pumps for heating and cooling, ground source heat pumps for heating and cooling, heat pump water heaters and in the Northeast, electric instantaneous water heaters.

The report also cites what regions offer the most potential for energy savings. Not surprising (See my July 2 blog, “Energy bill could open Southeast’s EE market” www.realenergywriters.com), the South offers the most potential, followed by the Midwest, Northeast, and the West, when residential, commercial and industrial energy use is considered. For reductions in CO2 emissions, the potential is greatest in the Northeast, followed by the South, the Midwest, and then the West.

Of course, savings achieved by switching from fossil fuels to electricity will be even greater as the nation introduces more renewable energy into its power generation fleet. EPRI says a good next step might be study how great those savings could be.

For years the electric power industry has taken heat for being a polluter. Odd to think it could also be what saves the planet.

For more details see: “The Potential to Reduce CO2 Emissions by Expanding End-Use Applications of Electricity,” www.epri.com.

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

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.