Energy heads home in 2011

By Elisa Wood

December 15, 2010

I have three predictions for 2011.

1. When it comes to energy policy, austerity will be in.
2. Therefore, energy efficiency will become a favored choice among mayors, governors, state lawmakers and Congress, as government becomes increasingly edgy about the cost of renewable energy.
3. The infamous leaky home will finally get some plugging.

My first two predictions are no-brainers. Governments are broke. They will look askance at anything that costs money, no matter how valuable, meaning that some renewable energy technologies will face tough going. Energy efficiency, on the other hand, offers a way to go green while lowering bills, a very appealing proposition at time of heightened economic and environmental concern.

Maybe not so obvious is why 2011 will be the year of the home. Here is my thinking.

Because of smart grid, the home is the new frontier in an energy revolution that shifts attention from the energy producer to the energy consumer. As Phil Harris, CEO of Tres Amigas, pointed out in a recent presentation, the electric grid is a huge machine, half of it devoted to making power and half to consuming it. While we’ve focused heavily over the years on improving production, we’ve barely considered energy use. http://www.youtube.com/watch?v=vyLuXgo4c74.

“Think about that. It’s a single machine, but for 100 years we’ve devoted all of our attention to generation, production and distribution. And how much science have we produced on the other half of the machine, the things that actually use electricity? That is what we have created on planet Earth. Very large systems with a lot of tension on half of the equation and almost none on the other,’ he said.

Smart grid – the integration of information technology into the grid — will shift the balance, giving consumers greater control over the flow of electrons into their homes much the way the Internet has given them control over information flow. This elevates the household from a passive to an active player on the grid. “I truly believe we are going from a utility-controlled environment to a customer-controlled environment,” Harris said.

Attention to household energy use is big ticket item. For example, retrofitting US homes could cut annual energy bills by $21 billion annually, according to the December 2010 report from the National Home Performance Council, “Residential Energy Efficiency Retrofit Programs in the US.” http://www.nhpci.org/

This isn’t lost on energy policymakers, and they are looking at far more than just caulking windows to achieve these savings. The movement is toward the “whole house retrofit,” which looks at a home as a total system.

“It looks not only at many different elements within the home that result in excessive consumption or waste of energy, but also considers the ways that these elements interact,” the NHPC report said. “Whole home retrofit approaches also review at health and safety issues within a home as a crucial feature of a retrofit job, with a commitment to do no harm.”

The report identifies 126 such programs now underway nationwide, many of which offer rebates to homeowners. The New York State Energy Research & Development Authority, for example, recently announced $5,125 incentives for single family homes and higher amounts for multi-family homes when they add “technologies that lower energy costs, reduce waste and water use, and improve indoor air quality.”

Home builders are paying attention. America’s 10 largest publicly traded homebuilders have started to improve their policies and practices relating to the environment and resources, according to a new study by Calvert Asset Management Company. “Green Recovery for America’s Homebuilders? A Survey of Sustainable Practices by the Homebuilding Industry,” evaluates how well major builders are doing when it comes to sustainable practices. The green building market, estimated at $36-49 billion, is expected to increase twofold between 2009 and 2013, according the report. Calvert found that among green initiatives, energy efficiency is the first choice among builders.

“Our survey of the 10 largest publicly traded U.S. homebuilders finds an evolving landscape. Whereas two years ago the industry had not yet begun to embrace sustainability as a core part of building design and construction, companies today have taken many meaningful steps toward developing greener and cleaner homes,” said Rebecca Henson, sustainability analyst at Calvert Asset Management Co. and co-author of the report.

Making predictions about energy is tricky. It’s an industry that can shift direction quickly because of unexpected events – hurricanes, wars, gas and oil supply shifts. But right now it looks pretty clear that the direction energy’s heading is home.

Time to export energy efficiency?

By Elisa Wood

December 8, 2010

We keep hearing that China is going to become a really big deal in world energy markets. But it wasn’t until I read this statement by Jane Henley, CEO of the World Green Building Council, that I grasped the scope of its coming influence:

“China is projected to build the equivalent of 10 New York Cities over the next decade.”

For some, such rapid economic expansion by China is cause for fear. Others see opportunity. The US green energy markets were nudged toward the opportunity-seeker category this week with word from the Department of Energy of the nation’s first export strategy for renewable energy and energy efficiency.

It’s a funny place for us to be. We tend to be known on the international stage for our energy consumption. We are the world’s largest oil importer, and its third largest producer. And when it comes to green energy, the last few years have been marked by more imports than exports. A flock of international companies have established themselves in the US to build wind and solar energy, sometimes by buying out US companies.

Many US’ green energy companies simply do not export, according to the report “Renewable Energy & Energy Efficiency Export Initiative,” issued December 7 by the DOE and several other government agencies. The report pegs US export of renewable energy goods at about $2 billion last year. This isn’t a very big number when you consider that worldwide $162 billion in private capital went toward renewables and energy efficiency technologies and $183 billion in government stimulus funds.

While the report quantifies current US renewable energy exports, it has a tougher time defining the energy efficiency market, not an unusual problem for an industry that encompasses everything from home improvements to combined heat and power plants. However, the export market potential for energy efficiency technologies is “likely substantial,” the report said.

So if you want to export energy efficiency, what countries should you look to?

If you manufacture industrial energy efficiency equipment, clearly economically developed countries offer best opportunities Markets also are likely to be ripe for US imports if they consume more energy than they produce (Germany), or if they have high energy prices (Japan), according to the report.

Canada offers the best market for US building materials. Canada already imports more building materials from the United States than the next 20 export markets combined. Other top export markets for building materials include Australia, China, Germany, Japan, Mexico, and the United Kingdom.

If you plan to export electronics, appliances, and information and communication technologies, look to Canada, China, Japan, Mexico, and Singapore, with Canada and Mexico representing the major importers, according to the report.

The full report, which explains specific strategies and supports the US will offer green exporters, can be found at http://export.gov/reee/eg_main_023036.asp.

Elisa Wood is co-author of “Energy Efficiency Incentives for Businesses 2010: Eastern States,” available at www.realenergywriters.com.

Smart Grid needs a Facebook

By Elisa Wood
We think we know how smart grid technology will change the utility industry. But do we really?

Take a look at this documentary made in 1969. It’s a view of how the world perceived the coming Internet (It’s also a pretty amusing look at how sexist our society still was at that point.) http://andrewsullivan.theatlantic.com/the_daily_dish/2010/04/before-the-internet.html.

While the film gets some concepts right, like online banking, it misses the Internet’s most world-changing benefit, the democratization of information — the production, distribution and consumption of data by everyday us, free from gatekeepers.

The film also misses the pizzazz and the fun of the coming Internet. There is no You Tube, no Google, no Wikipedia. And look at the kids. They are playing with physical toys. Why isn’t the Mom yelling at them for being on Facebook all day?

The Internet’s emergence – and our misunderstanding of what it would become – may provide hints about the future of smart grid. After all, many parallels exist between the two.
The Internet offered up democratization of information; smart grid promises democratization of electricity, giving consumers the ability to control at their fingertips power production, distribution and consumption. Indeed, if smart grid’s vision plays out to its fullest, you in essence become the power plant. Your in-home generators produce power that is stored by your plug-in electric vehicle, and your home computer controls the electricity distribution. The end game is energy savings and lower costs.

Some argue that the smart grid revolution will have a more profound impact on how we live than did the Internet. The megawatt, after all, is more powerful then the megabyte. Without the megawatt, the megabyte could not be.

Forty- years ago we had a pretty bland vision of the coming Internet. Had we been worried then about getting people to use the Internet – the way we now worry about getting them to use smart grid devices — we probably would have plumbed the depths of behavioral psychology for strategies. We would have asked: Can we get people to use the Internet if we show them that their neighbors do? How about if we demonstrate to them how much money the Internet will save them? Will they shop on the Internet if we explain to them it is better for the environment than driving to the store?

And, of course, all of that hand-wringing would have been a waste of time. What did it take to get people to use the Internet? Some really smart kids in dorm rooms with bright ideas: Bill Gates, Larry Page, Sergey Brin, Mark Zuckerberg and the like.

The electric power industry needs its own crop of dorm room geniuses that will find ways to make the smart grid irresistible to the consumer. If they emerge, maybe the next generation of parents will be lecturing their kids to get off the kilowatt zapper and go outside and play. After all, you can’t spend your whole day eking energy savings from the house.

Elisa Wood is co-author of “Energy Efficiency Incentives for Businesses 2010: Eastern States,” available at www.realenergywriters.com.