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.