What energy efficiency type are you?

By Elisa Wood

July 29, 2010

Not so long ago, consumers seemed to like energy efficiency just a little bit more than going to the dentist. Clearly that has changed, as evidenced by the recent run on appliance and home retrofit subsidies in several states.

Greens are no longer alone in swooning over front loader washing machines and geothermal heat pumps. But who exactly are these new energy efficiency buyers and what do they want? Two recent surveys shed some light.

E Source partnered with Nielsen Claritas in surveying 32,471 U.S. consumers to find out how ready they are to pursue efficiency. The survey revealed that larger households are more inclined toward energy efficiency than those with one or two people. In addition, demand response seems to be somewhat addictive. Try it once and you want to do it again. And, no surprise, appliance rebate programs are very popular.

Energy efficiency consumers can be broken into four categories, says E Source, which trademarked each of the names.

• EE Achievers, who represent about 12% of those surveyed, are the prime market. They’ll jump into one or more programs at a time: rebates, weatherization, audits, load management, efficient light purchases.
• EE Anticipators account for about 26% of the US population. They’re inclined to pursue efficiency but have yet to do so in any big way. They may enter the market in the next 12 months.
• EE Uncommitteds represent about a quarter of consumers. This group is interested but not ready to commit. E Source thinks they may respond to low-cost and no-cost approaches to energy savings.
• EE Indifferents, fortunately for the EE industry, represent only about 37%. Even if efficiency saves them money, they’re not motivated.

More details are available at E Source: http://www.esource.com/public/default.asp.

Meanwhile, the Electric Power Research Institute and Southern California Edison surveyed southern California residents to uncover their expectations when it comes to electric cars. It turns out that potential electric car owners are much like Internet users. They like speed. Survey participants do not want to wait around for their cars to be charged, and they’re willing to pay a premium to speed up the process.

“Public fast-charging availability (for example, a 10-15 minute charge facility) may have a strong influence on PHEV adoption, as two in five hybrid owners and one in three non-hybrid owners say the capability will ‘definitely’ influence their buying decision. About 75% said they would pay a 33% premium (over the slower, at-home rate) to fast charge. That percentage drops to 30% if the relative cost of fast charging is double that of slow charging,” says EPRI.

The EPRI report is available for free download here:http://my.epri.com/portal/server.pt?Abstract_id=000000000001021285

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Energy waste the size of Japan

By Elisa Wood

July 22, 2010

Here is a startling fact: US power plants waste more energy than many countries use, including advanced economies like that of Japan. The wasted energy is in the form of heat thrown off when power plants produce electricity.

This is one of the points being brought to light by the International District Energy Association (IDEA), as it promotes new federal incentives for heat efficiency.

While the US is focusing on cleaning up its electricity supply, it tends to ignore heat energy, even though it represents 31% of the energy we use, particularly to heat and cool buildings, warm water, and manufacture products.

IDEA is a group that promotes district energy and cogeneration (also called combined heat and power). These systems recycle heat waste for productive purposes. For example, a cogeneration plant might provide electricity to the grid and then recycle the wasted heat from the system into steam for use by a nearby factory. District energy systems often incorporate cogeneration. They supply water or steam to multiple buildings for space heating, domestic hot water, air conditioning and industrial processes.

IDEA, along with several environmental and efficiency groups, want Congress to approve a bill that will make available to heat the kind of incentives now given to clean forms of electricity. To that end, they are backing the Thermal Renewable Energy and Efficiency Act (S.3636), a bipartisan effort introduced by Sen. Al Franken (D-Minn.) and Sen. Kit Bond (R-Mo.)

The bill would create federal production tax incentives for heat energy, much like those that have spurred the wind and solar industries in the US. It also would expand tax-exempt bonds for the systems and reauthorize and broaden certain grants.

“The economic and environmental costs of the BP Gulf disaster are yet to be tallied, and the hurdles to comprehensive climate legislation are daunting. That’s why we must act now to implement policies that reduce fossil fuel consumption using proven clean technologies like district energy and combined heat and power,” said Rob Thornton, IDEA president, in a July 22 letter to US Senate leaders.

With today’s introduction of a smart grid, we are seeing many new systems and gadgets that promise energy savings. Industry insiders understandably eye them with skepticism; many of these technologies are untried. However, cogeneration and district energy are old ideas, decades old, and proven many times over. The US already has about 2,900 district energy systems and about 3,500 cogeneration plants. Still cogeneration represents only 8% to 9% of US electric capacity.

Cogeneration and district energy face the same problem as other capital intensive projects today. High upfront costs and reticent lenders make it hard to develop new projects.

Incentives do help spur these technologies. When the state of Connecticut began offering grants for cogeneration a few years ago, businesses and institutions jumped at the opportunity and quickly added installations totaling several hundred megawatts.

IDEA wants the Senate to incorporate heat energy incentives into any energy legislation that might pass this year. But it appears increasingly unlikely that a major energy bill will make it through Congress. The US may continue to throw away several countries worth of energy for some time.

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Electrifying vehicles: A car and its drama

By Elisa Wood

July 15, 2010

Who will play the lead character in Who Revived the Electric Car?, the sequel that is bound to be made to the famous documentary, Who Killed the Electric Car?http://www.whokilledtheelectriccar.com/. Many are vying for the role: car manufacturers, battery producers, scientists and now the Obama Administration.

The White House issued a report July 14 that credits federal stimulus money for the rapid drop in costs for electric cars.http://www.whitehouse.gov/files/documents/Battery-and-Electric-Vehicle-Report-FINAL.pdf. Once written off as a technological mishap, the electric car now appears nearly road ready for American consumers. The price tag is dropping rapidly, in part because of the $12 billion the federal government has pumped into alternative vehicles, according to the report. Of that $5 billion went to electrifying the US transportation fleet.

Electric cars will cost between $25,000 and $35,000, after tax credits, by the end of this year, says the White House. That’s down from $100,000 before passage of the 2009 American Recovery and Reinvestment Act. Electric cars are dropping in price because stimulus-funded manufacturers are producing batteries more cheaply.

Not long ago, it cost $33,000 for the battery of an electric vehicle with a 100-mile range. The Department of Energy expects the cost to drop by half between 2009 and 2013. By the end of 2015 some batteries should cost $10,000. The price of batteries for plug-in hybrid vehicles, or PHEVs, is falling quickly too. PHEVs can travel 40 miles on electricity and then automatically shift to gasoline. Priced at about $13,000 in 2009, the PHEV batteries are expected to cost only $6,700 in 2013 and $4,000 in 2015, according to the DOE.

The new electric car is seen as a way to reduce reliance on oil, which now supplies 95% of our transportation fuel. But the electric car has several interesting side stories as well.

Electricity is cheaper than gasoline. So, consumers should find themselves paying the equivalent of only $1/gallon to fuel electric cars, according to the National Renewable Energy Laboratory. http://www.nrel.gov/docs/fy07osti/41410.pdf. In coming up with that figure, NREL assumed it will take 9-10 kWh per gallon to operate a typical mid-size car, with vehicle efficiency of 2.9 mile/kWh. Researchers also assumed an electricity cost of 9.4 cents/kWh as the cost of electricity. While that is a fair average, the truth is that the price of electricity varies significantly nationally, and the cost of driving an electric car will vary accordingly. For example, in North Dakota electric rates run about 7 cents/kWh, while in Connecticut they are 19 cents/kWh.

Keeping operating costs low will depend on wide-spread implementation by utilities of time-of-use pricing, and of consumer willingness to take advantage of electricity at bargain times. Prices for electricity fall at night when demand diminishes. Electric grid planners are hoping consumers will charge their cars at night. Otherwise we may have to build more power plants to accommodate the cars, and that will negate some of their environmental and cost savings. Time-of-use pricing, which reflects lower night-time costs, should help encourage consumers to plug in at night. But consumer behavior is hard to predict.

Another side story is that the electric vehicle gives consumers a chance to act as power producers. The car batteries can store power which consumers can sell back to their local utility, possibly at high prices if done when the grid is in short supply.

And finally, it looks like the electric car will help the US create manufacturing jobs. The White House report says that in 2009, we had only two factories manufacturing advanced vehicle batteries. Those factories produced less than two percent of the world’s advanced vehicle batteries. By 2012, the US should have 30 factories with a 20 percent market share and by 2015 a 40 percent market share.

Should all this come to be, it is hard to say who will get the credit. What’s clear is that the story offers lots of happy endings to today’s energy woes. Here’s hoping it is a tale told true.

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International plan makes efficiency top priority

By Elisa Wood

July 8, 2010

While several clean energy technologies play an important role in reducing carbon dioxide emissions, none compare to energy efficiency, according to a new report by the International Energy Agency.

“Increasing energy efficiency, much of which can be achieved through low-cost options, offers the greatest potential for reducing CO2 emissions over the period to 2050,” says Energy Technology Perspectives 2010. “It should be the highest priority in the short term.”

The report offers a “Blue Map” that lays out least-cost action to guide policymakers. Under the game plan, efficiency, by far, produces the greatest gains. End-use fuel and electricity efficiency provide 38% of the cuts in CO2 and power plant efficiency an additional 5% over the next 40 years. Carbon capture and storage comes next at 19%, renewable energy 17%, end-use fuel switching 15% and nuclear power 6%.

In the US, Europe and other developed parts of the world, retrofitting buildings will be key to success, according to IEA.

“Direct emissions from buildings account for around 10% of global CO2 emissions; including indirect emissions from the use of electricity in the sector increases this share to almost 30%,” the report said. “Most buildings have long life spans, meaning that more than half of the current global building stock will still be standing in 2050. The low retirement rate of buildings in the OECD [Organization for Economic Co-operation and Development countries] and in economies in transition, combined with relatively modest growth, means that most of the energy and CO2 savings potential lies in retrofitting and purchasing new technologies for the existing building stock,” the report said.

Great attention also needs to be paid to efficiency in developing nations, given the “startling” fact that they will be source of most of the growth in energy demand. Separately, the US Energy Information Administration reports that demand for energy will increase by 84% in developing nations, and only 14% in advanced economies through 2035. The largest and fastest growing developing countries are Brazil, China, India, the Russian Federation and South Africa.

On the plus side, these nations will construct new buildings, so efficiency measures can be installed from the get-go, offering quick and strong energy savings, the report said.

An executive summary of the IEA report is available athttp://www.iea.org/techno/etp/.

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Smart meters: Truly a cure for energy blindness?

By Elisa Wood

July 1, 2010

And now for a dose of reality.

No doubt smart meters are a good thing, but even their most ardent fans must admit that a degree of hoopla surrounds these little digital boxes. We hear that if consumers can just see how much power they use in real time, and what it costs, our energy woes will be no more.

Smart meters will even cure the blind. The energy blind that is.

“It can be difficult to separate the hype from legitimate claims,” said the American Council for an Energy-Efficient Economy in a new report that evaluates what works – and what doesn’t – when it comes to smart meters.

ACEEE points out that we no longer load the stove with coal and wood for our primary energy. Instead, gas and electricity flow unseen to take care of our needs. Since we see only a monthly bill, we have no idea what energy costs in real time, how much we use, or even the acceptable social norm for energy consumption.

Thus, most people in the US are “among the energy blind,” says the report. Asking us to save energy based on our monthly bills alone is like asking a dieter to lose weight without a scale. “Perhaps it can be done, but the task is a lot more difficult,” the report says.

But seeing how much energy we use is one thing; acting on it another. Smart meters will not do their job if we rely on the technology alone. The consumer needs good reason to act, according to ACEEE.

These findings are important because the US and other nations are making a huge investment in smart grid technology. Smart meters represented only about 4.7% of US household meters in 2008. But their market share is expected to grow to 40% over the next five to seven years, according to the report.

The report looked at 57 studies, three decades of research in Europe, North America, Australia and Japan, and found that smart meters can be effective. In fact, households using them have reduced electricity use 4% to 12%.

But much depends on how the meters present information and feedback and how we respond. Ultimately, the smartness of smart meters relies on utilities understanding human psychology.

The report offers several interesting insights about our energy behaviour. For example:

• We are less apt to respond to programs that focus on reducing energy at specific times (peak periods when costs are high) than reducing energy all the time.
• We need to feel our actions truly make a difference.
• An energy crisis is more likely to motivate us to conserve than arguments about climate change, especially if we live in the US.
• Smart meters may be unnecessary. We like our cell phones, and if only 20% of US consumers used them to manage household energy use, we could significantly reduce energy waste.
• We need feedback on a long-term basis to continue to save energy.
• When we receive feedback on energy use, we tend to change our habits and make small changes like installing weather stripping. To a lesser degree, we replace appliances, although they offer the most energy savings.

There has been a lot of talk about how smart grid will marry two giant industries: energy and information technology. True. But the ACEEE study makes apparent that a third field needs to play a big role: behavioural science.

“The bottom line here is very simple: Smart meters in and of themselves are just not ‘smart’ enough to get the job done for consumers and our economy. While advanced metering provides a useful tool to save energy, cut consumer electric bills and reduce greenhouse gas emissions from power plants, utilities need to use these advanced meters to provide consumers with information on their consumption in ways that grab consumers attention and encourage them to take action,” said John “Skip” Laitner, ACEEE’s director of economic and social analysis.

The report can be found at http://www.aceee.org/press/e105pr.htm

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