Thursday, July 23, 2009

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.

Thursday, July 16, 2009

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.

Thursday, July 9, 2009

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.

Thursday, July 2, 2009

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.