Wednesday, February 29, 2012

Will cyber-sensitives reveal the future of energy efficiency?

By Elisa Wood

February 29, 2012

The US economy is three times larger than China’s, yet when it comes to developing a clean energy industry, China keeps besting us. The US came in second – again – to China this quarter in Ernst & Young’s much-watched renewable energy ranking released February 28.

But there is one clean energy segment where the US leads: demand response.

Demand response comes into play when there is high demand for power straining the electric grid, usually hot summer days. Utilities or grid operators give factories and other businesses a payment in return for decreasing their energy use during these peak periods. As a result, demand response not only averts blackouts, but also saves us money, since it is far cheaper to conserve energy when the grid is strained than it is to generate more power.

An American-grown industry, demand response is now gaining international attention. EnerNOC, a Boston company that provides demand response services, finds itself increasingly explaining the concept abroad, according to Gregg Dixon, senior vice president of marketing and sales. The company now serves about 12,000 businesses, colleges, hospitals and other large energy users, not only in the US, but also in Canada, the United Kingdom, Australia and New Zealand.

Other demand response companies, Comverge, Johnson Controls, Silver Spring Networks, Wipro and Honeywell, also report international expansion, according to Pike Research, which expects the $1.3 billion global market for demand response to see a compound annual growth rate of 37% by 2016.

So demand response is clearly a success story, at least when it comes to reducing use of energy by companies and large institutions. The next frontier for demand response is the homeowner. And unfortunately, that might be a tougher market to crack. The average person shows little interest in taking the time to cut back on energy use during peak periods.

“The concept from an economist’s point of view makes sense. But unless it is managed for us in a very simple way, I just don’t see people using it. And I’m a zealot on this stuff,” Dixon said.

A recent report by the American Council for an Energy-Efficient Economy underscores the problem. It turns out homeowners aren’t saving a lot of energy, even when new energy gadgets give them real-time feedback on the costs.

These home gadgets, which include display monitors, smart meters, and web interfaces, are meant to encourage people to cut back during peak periods, when energy prices are high. But ACEEE found homeowners achieved only a 3.8% overall savings in nine pilot programs it studied. Four of the pilots showed peak period savings of up to 11.3%. The programs were conducted in the US, UK and Ireland.

There is, however, one intriguing exception, a group that does respond. ACEEE isn’t quite sure who they are, but calls them cyber-sensitives. They do not fit into any one demographic box; they are not a certain age or income. But they represent a swath of the population that achieves energy savings of up to 25% when given devices that offer them real-time feedback on their energy use.

Some in the energy industry believe household demand response will never be accepted beyond the cyber-sensitives. Others see this group as a starting point for further study that may reveal what encourage us to save energy, whether it is costs, comforts, green altruism or even an emotional or intuitive response to technology, says ACEEE.

It’s hard not to draw a parallel between these energy information gadgets and the early days of personal computers. At first the computer was viewed as a device that would largely be used in business, much as demand response is today. Then came Steve Jobs and we all know the rest of the story. If demand response companies can capture the attention of households, as they have businesses, maybe the US will find its got its new Apple.

Elisa Wood is a long-time energy writer whose work can be found at RealEnergyWriters.com

Thursday, February 23, 2012

Energy Efficiency: A way for colleges to save and make money?

By Elisa Wood

February 23, 2012

The Obama administration – and every parent with a child in college – is concerned about the ever-escalating cost of higher education. And for good reason. Tuition, room and board rose 37 percent for undergraduates at public colleges and 25 percent at private colleges (adjusted for inflation) from 2000 to 2010, according to the National Center for Education Statistics.

Colleges are enormous energy users. National Grid says that in the Northeast, a US higher education hub, a typical 50,000-square foot college building uses more than $200,000 of energy annually. So one way for colleges to reduce costs is through greater energy efficiency, especially if it is financed adeptly.

The Green Revolving Fund offers an interesting model. Basically, the college sets aside money in a fund to make energy efficiency improvements, and then uses the money saved on energy bills to replenish the fund and make more improvements to further drive down energy bills.

About 50 colleges have established GRFs, and they are achieving a median annual return on investment of 30 percent, according to Mark Orlowski, executive director of Sustainable Endowments Institute, who presented a recent webinar on the funds through the Yale Center for Business and the Environment.

A GRF removes energy efficiency from competition for college resources. Energy improvements cease to be a burden on the operating budgets, and conversation about efficiency transforms into one about investment and re-investment. Colleges find seed money for GRFs from a variety of sources, including reserve funds, alumni donations, endowments and utilities.

The Sustainable Endowments Institute and several partners have launched a challenge to raise college GRF funds to a cumulative $1 billion, up from the current $65 million. Existing funds vary in size from $5,000 at the College of Wooster in Ohio to $25.45 million at Standard University. The average fund is $1.4 million, according to SEI. The funds can be found in 25 states, and at colleges as big as University of Illinois at Urbana-Champaign with 42,000 students and as small as Kalamazoo College with an enrollment of 1,381. Students, themselves, started the programs at 17 of the schools.

A recent blog by Joe Indvik posted by the Association for Advancement of Sustainability in Higher Education offers several good reasons for colleges to pursue GRFs over other ways to invest in efficiency. For example, he points to the “sizzle” factor. “A GRF is a unified, purposeful investment vehicle that is easy to market and generates a more positive public image than traditional investments. It demonstrates concrete commitment to sustainability in a way that one-time investments cannot,” he says.

This is not a new concept. Harvard has had a GRF for more than a decade. But the idea has taken off in recent years, with about three quarters of GRFs formed since 2008. Energy efficiency companies would be wise to track their creation, since they clearly open the door to new business opportunities. More details can be found at www.greenbillion.org and http://www.endowmentinstitute.org/.

Elisa Wood is a long-time energy writer. See more of her work at RealEnergyWriters.com.

Thursday, February 16, 2012

Obama’s budget good for energy efficiency

By Elisa Wood

February 16, 2012

President Obama's 2013 budget caused a lot of smiles this week among energy efficiency advocates – even if it is more of a wish list than anything else. Obama calls for about $1.2 billion in spending for energy efficiency.

What’s this mean to the energy efficiency industry?

Kateri Callahan, president of the Alliance to Save Energy, says that Obama’s budget represents a dramatic increase from current efficiency spending. And while the sector won’t receive that kind of money in the final budget, it still should do well, given that the starting point is so high in a time when many budget items begin with cuts.

“The administration's vigorous support for energy efficiency at this stage of the game should help ensure that we get funding almost as robust as we have currently,” she said.

It’s not easy figuring exactly how much the federal government spends on efficiency now, since funding is spread out over several programs and sometimes infused into budgets for defense, science, agriculture, environment and commerce.

By ASE’s count Congress appropriated $811 million in 2012 for energy efficiency programs in DOE’s Office of Energy Efficiency and Renewable Energy (EERE), and $50 million for Energy Star at the Environmental Protection Agency.

In all, Obama increases the Department of Energy budget by 3.2%, bringing it to $27.2 billion for 2013. He allots $2.3 billion for both the efficiency and renewable energy programs in EERE, and maintains Energy Star spending at the same level. Funding for high-risk research increases 27% and for manufacturing advancement 150%. Obama offers an 80% increase in programs that cut energy use in buildings and factories. He also continues to press Congress to pass the HomeStar bill to reduce household energy use.

Raising spending might sound alarms, given the US deficit. However, spending on efficiency actually decreases society’s energy expenses. Energy efficiency cost about 1.6 to 3.3 cents/kWh for utilities in 14 states studied by the American Council for an Energy Efficient Economy. Had those utilities built power plants rather than conserved energy, they would have paid 6 to 14 cents/kWh.

“The President clearly recognizes that energy efficiency is a critical component of our economic future and is the fastest, cleanest and cheapest way to meet growing energy needs,” said Terry Singer, executive director of the National Association of Energy Service Companies.

Obama also cuts $4 billion in fossil fuel subsidies. This is significant because subsidies tend to depress fossil fuel prices and encouage more consumption. The International Energy Agency has been strongly pushing for the kind of fossil fuel subsidy cuts Obama proposed. Here are some of the reasons IEA gives in a report issued late last year.

· Fossil fuel subsidies worldwide totaled $409 billion in 2010, up $110 billion from the previous year

· Without reforms, the subsidies will reach $660 billion or 0.7% of world GDP by 2020

· Poor people don’t benefit from these subsidies. Only 8% of the $409 billion went to the poorest 20%.

· Phasing out fossil fuel subsidies by 2020 would decrease energy consumption by 4.1%

Obama’s tried before to make the fossil fuel cuts, and chances are they are more wish than real, much like the dramatic increases in energy efficiency spending. But the budget news is not all ‘if wishes were horses.’ It signals a general support for energy efficiency at the top of US government. Coupled with the aggressive energy efficiency policies in many states, Obama’s budget suggests a strong year ahead for the energy efficiency industry.

Elisa Wood is a long-time energy writer whose work can be found at RealEnergyWriters.com.

Thursday, February 9, 2012

Opportunities for energy innovators

By Elisa Wood

February 8, 2012

For a long time ‘clean’ and ‘green’ marked the forward trend in the energy industry. Then came the quest for ‘smart’ energy. And now ‘innovation’ is the buzzword.

It’s easy to see why. As Americans, we believe our ability to innovate sets us apart in today’s international market. Sure China can manufacture computers and cell phones more quickly and cheaply, but we came up with Google and IPhones in the first place.

The energy industry offers a lot of opportunity for US innovators, given our aging grid, quest for alternatives to fossil fuels, and our glimpse into the possibilities of a virtual, democratized grid that gives consumers more control over their energy use and production.

But will energy innovation help the US job market? Or will the products be conceived here but be manufactured elsewhere?

Siemens U.S. CEO Eric Spiegel offers some interesting thinking in a recent piece: “Where the Jobs Are: Higher Technology Manufacturing.” He takes issue with the idea that US manufacturing is doomed.

Such thinking wrongly assumes that the manufactured products of the future, like those of today, will be commodities, “the kind that could be built of equal quality, with equal technology, anywhere in the world,” Spiegel wrote. Blue jeans are his example.

He said that if innovation delivers, tomorrow’s products will be more high-end and require “skilled workers, precision assembly, intensive research, and complex technology,” the kind of thing the US does well.

Many new energy products, like smart grid technologies and wind turbines, require skilled manufacturing. Another, he points out, is the high efficiency natural gas turbine that Siemens builds in North Carolina. If the US remains an innovation leader, more of these high-end manufacturing jobs will make their way here, according to Spiegel.

But he isn’t Pollyanna about the US’ economic future. Sure, high-end energy manufacturing is occurring in the US, but it’s happening elsewhere as well: Europe, Brazil and parts of Asia. They too are innovating.

So the US has no reason to be overly confident about its innovation economy. Well aware of the intense competition, the federal government, states, universities and others are trying to create a more favorable climate for innovators. Below are a few ways that’s happening. I welcome readers to add to the list in the comments section of this blog. With the exception of the NYSERDA program, all of these were announced this week.

  • The US Department of Energy is offering $12 million to speed solar energy innovation from the lab to the marketplace through the federal SunShot Incubator program, with applications due April 9
  • Connecticut Governor Dan Malloy said in his mid-term budget address that the state will make $250 million available for high tech innovators.
  • The Massachusetts Clean Energy Center awarded $120,000 in clean energy research grants for early stage investigation into energy efficient fibers, microalgae for biofuels, and electrolytes for energy storage.
  • A five-year $469 million program is underway at the New York State Energy Research and Development Authority (NYSERDA) to foster innovation in energy-related technology and market development.
  • The American Chemistry Council has launched a campaign to foster a national energy strategy, and also is making known chemistry’s role in energy breakthroughs. Chemistry has helped bring about products that save 10.9 quadrillion Btus of energy annually, enough to power up to 56 million households or up to 135 million vehicles each year, cutting $85 billion in energy costs annually, according to an ACC study.
  • Stay-tuned for a major energy innovation grant announcement from the University of Pittsburgh.

Elisa Wood is a long-time energy writer whose articles can be found at www.RealEnergyWriters.com.

Wednesday, February 1, 2012

Clean energy: How much hot air?

By Elisa Wood

February 1, 2012

NewScientist’s January 28 issue is likely to unsettle clean energy advocates – but it is worth the read.

The cover article, “Power paradox: Clean might not be green forever,” posits that even renewable energy can warm the planet, and eventually change climate, if we continue to ratchet up power production to serve our ever increasing demand for electricity.

It turns out that wind farms create heat, albeit a miniscule amount compared with fossil fuels or nuclear power, according to the article. Research from the University of Illinois in Urbana-Champaign indicates that wind turbines heat the ground nearby at night, apparently caused by the turbines sucking air downward from above.

Solar panels, too, create unintended heat. The article points to a study that indicates building a 1-TW solar power plant in California’s Mojave desert could raise temperatures in the air by 0.4 degrees Celsius. When dark solar panels cover light-colored sand, they warm the air and change temperature and wind patterns within a 300-kilometer radius, the article says.

Energy almost always creates some sort of waste heat, even in powering our cell phones and computers, says Eric Chaisson of the Harvard Smithsonian Center for Astrophysics, in the article. Electricity heats the circuits. We don’t use this heat; it dissipates into the air.

Of course, this is one of those glass half-full or half-empty issues. Heat by-products are not bad thing if we make use of them. Farmers already take advantage of the localized warming caused by wind turbines to fight frost, says the article. And while solar panels may generate heat when they cover light-colored surfaces, like sand, they cool when placed over dark surfaces, like a black roof.

More importantly, we can sometimes use recycled heat instead of fossil fuels. Residential solar panels are now available that convert waste heat from the panels into useful energy for cooling a house. And for many years we’ve captured and used waste heat in buildings and factories through combined heat and power (CHP) and recycled industrial waste heat systems.

Plenty of need exists to channel heat energy for useful purposes, including air conditioning in the US, as our aging population continues to shift southward. Globally, about 47% of the energy we consume goes toward heating/cooling, with industry as the largest single user, consuming about 43%. Homes follow at 41%, then commercial and public buildings, 9% and agriculture 6%, according to the International Energy Agency.

Should we worry that renewables generate heat? Perhaps. But the impact is small. Heat from renewables poses no immediate threat. Long term, however, waste heat from all sources could become a serious contributor to climate warming, if we continue to increase our consumption of electricity at the current rate of about two percent annually, the article says.

So clearly, it would be hard to take any argument against renewable energy seriously based on its heat output – particularly since renewables can displace fossil fuels that create far more warming. But the findings do underscore the value of exploring energy efficiency measures that make use of waste heat. We hear a lot about smart power; but stay tuned as smart heat rises up as a new priority.

Elisa Wood is a long-time energy writer whose articles can be found at www.RealEnergyWriters.com.