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.